Simon Peters, cryptoasset market analyst at multi-asset investment platform eToro, says: Bitcoin ‘breakout’ on the horizon?
The bitcoin price had a difficult start to the month, falling as much as 9% to a low of $64,500.
The move lower coincided with a rise in treasury yields and the US dollar, as investor bets of a June rate cut cooled following the release of some stronger than expected economic data.
Interestingly, since reaching an all-time high of $73,800 on 14th March, the bitcoin price had been consolidating within a symmetrical triangle chart pattern, making lower highs and higher lows converging to a point.
As is generally the case with symmetrical triangles in an upwards trend, the price has now broken out to the upside and is targeting the all-time high again.
With demand from the spot ETFs returning to net inflows over the last two weeks, the sell side across exchanges order books being relatively thin and important inflation data being released in the US this week, all the ingredients are there to potentially see fresh all-time highs before the block reward halving in 11 days time.
Currently bitcoin is trading at $70,600, just 4.5% away from the all-time high.
LAST WEEK’S MOVERS
Last week was a difficult week for major market cap cryptos, only posting single digit gains at best.
The biggest movers occurred in the opposite direction. Meme coins, in particular DOGE, were the biggest losers falling around 20%, eroding the prior week’s gains.
EYE-CATCHING STORIES
Ripple to issue USD stablecoin on XRP ledger and Ethereum blockchain
Ripple announced plans to launch a USD stablecoin, initially on the XRP ledger and Ethereum blockchain, with plans to expand to additional blockchains and DeFi (Decentralised Finance) protocols in time.
Similar to other major USD stablecoins such as USDT (Tether) and Circle’s USDC, Ripple’s proposed stablecoin will also be backed by US dollar deposits, short-term US treasuries and other cash equivalents.
The stablecoin market cap is currently around $150 billion, and is forecasted to exceed $2.8 trillion by 2028. The announcement by Ripple shows the company’s ambition to capture a share of this growing market, as well as driving more adoption and development of the XRP ledger.
Ripple’s stablecoin is expected to be available later this year, subject to applicable regulatory approval the press release went on to say.
Lightspark selected to bring Lightning Network to Coinbase
Lightspark has been selected by Coinbase to bring the Bitcoin Lightning Network to its platform and services as announced in a press release last week.
The Lightning Network is a layer-2 network to scale Bitcoin and make transactions faster and cheaper than on the main blockchain itself.
Lightspark is led by former PayPal president David Marcus, who also was behind the Diem (formerly Libra) stablecoin project whilst at Meta.
ProShares launch first 2x and -2x bitcoin ETFs
ETF provider ProShares last week launched the first leveraged bitcoin ETFs (Exchange Traded Funds). BITU will target 2x daily bitcoin returns, and SBIT, an inverse leveraged ETF, will target -2x daily bitcoin returns.
In their press release ProShares CEO Michael L. Sapir said ‘BITU and SBIT are designed to address the challenge of acquiring leveraged or short exposure to bitcoin’, while offering ‘the opportunity to pursue magnified bitcoin returns or target a level of exposure with less money at risk’.
ProShares gained prominence in the crypto space with the launch of the first bitcoin futures ETF back in October 2021.
Bitcoin spot ETF trading volumes nearly triple in March
As reported by The Block, spot bitcoin ETF cumulative trading volume reached $111 billion in March, nearly triple the $42 billion in February, showing an increasing interest in these instruments as a way to get exposure to bitcoin.
It’s been nearly three months since the bitcoin spot ETFs launched. BlackRock’s IBIT, Fidelity’s (FBTC) and Grayscale’s (GBTC) continue to dominate daily trading volumes, the latter (GBTC) however is predominantly outflows.
Since GBTC converted into a spot bitcoin ETF, its bitcoin holdings have dropped 46%, from around 619,000 BTC to 333,619 BTC. BlackRock’s IBIT recently crossed the 250,000 mark in bitcoin holdings, with Fidelity’s FBTC holding just under 150,000 BTC.
Overall, the 11 US bitcoin spot ETFs hold nearly 840,000 BTC, around 4.25% of the current circulating supply.
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