- Bitcoin has remained range-bound at $38,000 as the momentum that came with the Biden executive order dies off, with mid-range cryptos struggling much more.
- One expert tells CNF that Bitcoin’s supply dynamics have shown some bullish accumulation activity this week and expects the price to get back over $40,000 soon.
It’s been a week since President Joe Biden announced that he would be signing an executive order on crypto, a move that many saw as legitimizing the nascent industry. Bitcoin shot up on the news to surge past $42,500, gaining 9 percent in a few hours as Ether followed suit with an 8 percent gain. It’s not been rosy since and BTC has dipped to $38,000 where it now remains range-bound. But as one expert tells CNF, there are bullish signals for the largest crypto.
“Trading ranges on market majors remain tight as the conflict between Russia and Ukraine prompts widespread risk-off sentiment,” Will Hamilton, the head of trading and research at Aussie institutional crypto investment firm Trovio Capital Management, tells CNF.
He added, “Bitcoin opened the week testing range lows of $37,180 followed by a 14.6% move to the upside before being rejected at $42,600 and returning to lows for the remainder for the week.”
BTC’s dominance has, however, been a big gainer amid the uncertainty, hitting a multi-month high at 43.7 percent, aided greatly by the poor performance by most mid-range cryptos.
The overall market cap went up by $0.12 trillion in the past week, however.
Despite the sideways trading, Hamilton believes that Bitcoin is due to break out, pointing to positive supply dynamics in the market.
He commented:
Despite negative macro sentiment Bitcoin’s supply dynamics have shown some bullish accumulation activity this week. Notable exchange outflows occurred during the latter half of the week as 40,700 Bitcoins were removed from exchanges, the most notable movement being a 31,000 outflow recorded on Coinbase last Friday.
“These large outflows provide further support for the Bitcoin Holder net position change chart below, which recently flipped into accumulation territory,” Hamilton believes.
Hamilton, a former investment banker with Sydney-based Pitt Capital Partners, further pointed to the recent refusal by Europe to ban proof of work tokens as a big win for the industry.
“If passed, the excerpt would have required blockchain operators to submit a rollout plan detailing how they will achieve environmental sustainability compliance. Failure to submit a plan may prohibit coins from being mined or traded in the EU,” he told CNF.
At press time, BTC is changing hands at $38,820, up by a marginal 0.12 percent in the past week.
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