Market Wrap: Bitcoin Expected To Pause For The Next Rally

Bitcoin buyers are in profit-taking mode as the cryptocurrency is testing the $40,000 resistance level. Sentiment has improved significantly over the past week, although some analysts think it’s time for a break before taking another leg higher.

“BTC broke through $35K easily, but I think it will probably be harder to break through $40K this time,” Justin Chuh, a senior trader at Wave Financial, wrote in an email to CoinDesk.

“Miners and sellers are coming in to make money again and buyers can’t push it any higher after taking that hit,” Chuh wrote.

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Related: Do you love Bitcoin? My your values

cryptocurrency:

Traditional markets:

  • S&P 500: 443.9, +0.056%

  • Gold: $1808.1, +0.5%

  • The 10-year Treasury yield closed at 1.233%, compared to 1.238%

moving average watch

Sentiment could easily shift from bullish to bearish as bitcoin remains in a consolidation phase with strong overhead resistance.

“BTC was already knocked down again by its 200-day moving average, just like it was in early June, but it should try again after a breather and hopefully not creep below $35K,” Chuh wrote.

Related: Israeli law would force crypto investors to hold positions above $61K. to report

“If (and when) bitcoin crosses 200 days, it will signal confidence in the market and show to many players that the bulls have regained control of the market,” Alexandra Clark, a trader at the UK-based brokerage firm in digital assets GlobalBlock, wrote in an email to CoinDesk.

For the time being, trading activity is significantly higher than in June. Short-term call options traded actively Wednesday morning as bitcoin approached $40,000, according to data from Skew.

GBTC discount is getting smaller

Grayscale Bitcoin Trust (GBTC) Shares reduced their discount against the underlying cryptocurrency held in the fund – possibly a sign that buyers are using the vehicle to bet on the recent rally in the digital asset markets.

GBTC shares traded at a 6.6% discount to net asset value (NAV), the narrowest margin since June 22, on Tuesday, according to data from the crypto derivatives research firm. skew. By mid-June, the discount had risen to 15%.

Some investors may have bought GBTC stock in hopes that the discount will evaporate with a bull revival in bitcoin. In that scenario, the buyers would reap any price gains on bitcoin while taking additional profits from a reduction in the discount. (Grayscale Investments, which manages the trust, is part of Digital Currency Group, which also owns CoinDesk.)

Ether trading volumes soar

The ether market grew three times faster than the bitcoin market did in the first six months of the year as major investors diversified into the Ethereum blockchain native token, according to the semi-annual assessment of crypto exchange Coinbase published on Monday.

Crypto CEOs Are Bullish

Crypto investors have just experienced one of the toughest quarters ever. Despite a recent recovery, fears of over-regulation, the downturn in mining in China and environmental concerns have all contributed to negative sentiment in the sector. Most CoinDesk 20 assets, which make up about 99% of the crypto market by verifiable volume, ended the second quarter with negative returns.

The CoinDesk Bitcoin Price Index (XBX) fell 40%, its third worst quarter on record. Conversely, the CoinDesk Ether Price Index (ETX) ended the quarter up 18.7%. While bitcoin has recovered some of its losses, the optimism is far from what it was at the start of the second quarter.

However, some crypto CEOs still expect a six-figure bitcoin price, saying the medium-term outlook for the crypto market is positive even if the sentiment isn’t, CoinDesk’s Will Canny reports.

Why stablecoins are in the spotlight

Stablecoins have been around for about seven years, but they have never been talked about more heatedly than in recent weeks, not only within the crypto community, but also among regulators and traditional market investors.

There has been a lot going on in the stablecoins world lately, and some of it can be overwhelming. Here are the three big things happening now:

  • Tether is under a cloud: As the most traded cryptocurrency on the market, USDT has become a backbone for the entire cryptocurrency ecosystem. More than half of all bitcoin transactions are made against it. However, Tether, the company behind the digital token, is plagued with regulatory issues.

  • Regulating heat: Stablecoins had a total market cap of $116 billion as of Monday, nearly quadrupling since the start of this year, according to CoinMarketCap. As growth has accelerated, so has the attention of US and other regulators.

  • Circle goes public, other stablecoin issuers reveal more information: Circle, the publisher of USDC, the second-largest stablecoin, has also been in the spotlight. Circle plans to go public through a merger with Concord Acquisition Corp., a publicly traded Special Purpose Acquisition Corporation (SPAC). The deal would value the crypto financial services company at $4.5 billion. Another stablecoin issuer, Paxos, has also released a reserve breakdown for the first time for its stablecoins, Paxos standard and the Binance-tagged BUSD. About 96% of the reserves were held in cash and cash equivalents, while 4% as of June 30 was invested in US Treasury bills.

Altcoin Collection

  • XRP rallies: XRP, a cryptocurrency used by Ripple in its payment network, collected to a five-week high on Wednesday after the company said it is targeting the $1.8 billion Philippine remittance market. The cryptocurrency changed hands for $0.74 during European hours, hitting its highest level since June 21 and representing a 13% gain on the day, according to CoinDesk 20 data.

  • Ether trading volume rises: Ether trading volume was $1.4 trillion from January to June, up 1.461% from $92 billion in the first half of last year.

  • Burger King Brazil accepts dogecoin: Burger King Brazil now accepts dogecoin (DOGE, +2.64%) as a means of payment to buy Dogpper, a dog snack, from the fast food chain. According to the company’s official website, the service has been available since Monday, although users should check the availability of delivery in their region, the company said. Each Dogpper – a dog treat that plays on the name of Burger King’s most famous menu item, the Whopper – costs 3 DOGE. The company recommends purchasing a maximum of five units per order due to “availability reasons”.

Relevant news:

Other markets

Most digital assets on CoinDesk 20 ended higher on Wednesday.

Notable winners from 21:00 UTC (4:00 pm ET):

xrp (XRP) +12.51%

Eos (EOS) +6.43%

uniswap (UNI) +4.77%

notable losers

the graph (GRT) -0.31%

longing for finance (YFI) -0.23%

USD Currency (USDC) -0.06%

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