TL;DR
- Bitcoin trades sideways around $52K as indicators point to potential big move
- Ethereum rallies on institutional interest but centralization risks loom
- Circle drops Tron support for USDC stablecoin due to regulatory issues
- Nvidia stock surge sends markets to new highs, crypto could follow
Bitcoin Breakout Imminent?
Last week, Bitcoin failed to break out of the $52K range it’s traded in for two weeks. This sideways action likely results from inflows to Bitcoin ETFs balanced by selling pressure. An ongoing court case around Satoshi Nakamoto’s identity has also created some uncertainty.
If macroeconomic issues don’t arise, Bitcoin may continue trading sideways based on shifting supply and demand dynamics. An interesting development is that last week was Bitcoin’s first red week in over a month. This could signal either consolidation before a bull run to $62K or a trend reversal preluding a crash.
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Ethereum Catches Up as Institutions Circle
Ethereum finally shows signs of catching up to Bitcoin’s gains this year. The ETH/BTC ratio flipped back above its weekly Bollinger Band moving average, indicating a potential upside squeeze ahead. Ethereum also seems to be painting a bull flag against stablecoin pairs, suggesting a rally to $3,300 may occur.
Ethereum fundamentals look solid as well between growing DeFi activity and anticipation of next month’s Shanghai upgrade. Institutional investors also appear to be pivoting attention to Ethereum, as seen with a recent report from Bernstein Research.
However, some institutions have warned that Ethereum’s coming ETFs could centralize supply and threaten network security. An S&P Global report noted that staking service Lido Finance already holds almost a third of Ethereum’s total staked supply. Ultimately though, Ethereum has shown a willingness to evolve its protocol rules to address issues.
Circle Drops Tron Support for USDC
Circle announced it will stop issuing USDC on the Tron blockchain due to regulatory pressure. This watershed moment could inspire other stablecoin issuers to ditch Tron and problematic chains alike. It also shows the mounting risks from crypto’s reliance on centralized stablecoins. Hopefully Circle’s decision will motivate developers to build truly decentralized stablecoin alternatives, as it seems we’ll need them.
Nvidia Boosts Markets to New Highs
Last week’s parabolic surge from Nvidia after strong earnings drove stock indices to fresh all-time highs. Fund flows into indexes weighted by market cap means Nvidia’s upside run may continue despite already astronomical valuations. With trillions in cash still sidelines, markets could keep melting up for longer than seems reasonable.
Crypto stands to benefit from the stock surge. Bitcoin is twice as volatile as the Nasdaq, so if correlations hold, a 35% stock index rally could translate into a 70% BTC explosion towards $80K. But as always, it’s impossible to predict exactly how long these euphoric conditions will last before the party ends.
This week’s best-performing cryptocurrencies had an eclectic mix of reasons behind their pops. AI hype supercharged some like SingularityNET, while governance votes added value to the likes of Uniswap. The diverse catalysts behind these gainers underscore the many variables that can impact token prices in the wild world of crypto.
Thank you for reading “Bitcoin Breakout Imminent?“.
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