Markets
What to watch in the Bitcoin and cryptocurrency markets in the second half of 2024
Main conclusions
- Crypto bulls say bitcoin may have room to grow as demand for spot bitcoin ETFs and the effects of the halving may not have kicked in yet.
- Some industry observers say that while there is demand for an ether ETF on sight at launch, it is unlikely to have the same level of success as bitcoin versions.
- Regulatory clarity remains a key hurdle, with investors watching statements from presidential candidates and recent developments for clues.
Bitcoin has surged this year, rising more than 30% as demand for ETFs holding the leading cryptocurrency helped its price rise. But bitcoin prices have cooled recently, pulling back from record highs set earlier this year.
That trend continued on Friday, with bitcoin falling below $57,000 in late afternoon trading after climbing above $73,000 in March. So what’s the outlook for the rest of 2024? Bullish investors say increased demand for cryptocurrency-focused exchange-traded funds could drive prices higher. But other questions loom on the horizon.
Demand for Bitcoin and Ether ETFs Could Boost Cryptocurrency
Demand related to spot bitcoin (BTC) exchange-traded funds that started to negotiate in January has supported the cryptocurrency this year. Bulls say that effect has not yet happened.
New ETFs have seen net inflows of more than $14.4 billion, according to Farside Investors. Most of the flows into bitcoin ETFs, which hold the currency, currently come from self-directed investors, and market watchers believe more demand could come as financial advisors become less cautious recommending crypto products to customers, boosting bitcoin itself.
“We also don’t see a lot of institutions like pensions or endowments getting involved in ETFs yet,” said Bloomberg Intelligence analyst James Seyffart. “To me, that means there are definitely areas of potential growth in demand.”
Investors are widely expecting ether-based ETFs (ETH) to hit the market this year: The Securities and Exchange Commission is expected to approve individual ETF applications by the end of summer. This could increase demand for cryptocurrencies.
Bitwise CIO Matt Hougan estimates $15 billion in inflows into ether ETFs within the first 18 months. Seyffart, meanwhile, expects them to capture 20% to 25% of what bitcoin funds attracted during the first few months.
“We don’t believe Ethereum ETFs will have as much impact as Bitcoin ETFs, which have broken many different records in terms of their flows, assets and trading volumes,” Seyffart told Investopedia.
Rising demand for ETFs and the underlying bitcoin could mean higher prices, especially as the cryptocurrency’s supply approaches the 21 million cap.
The election – and other issues to watch
Other topics to watch in crypto this year include:
The presidential election. Donald Trump emerged as more supportive cryptocurrency than during his presidential administration. President Joe Biden’s administration has been seen as supportive of stricter regulation, although some industry observers have interpreted it as a recent decision not to press charges related to Ethereum 2.0 as a sign of an evolving perspective.
“I would put the chances of ‘clarity’ before the election at 0%, and I think if there is a legislative framework, it would emerge next year at the earliest,” said Sarah Brennan, general counsel at Delphi Ventures.
The Aftereffects of Bitcoin Halving: Bitcoin halving—in which the amount of new bitcoins generated roughly every 10 minutes is cut in half— have historically had a positive impact on their price, according to analytics firm CCData, for periods ranging from about 370 days to nearly 550.
The last halving occurred about six months ago, but differed from previous instances because bitcoin had rallied long before that. Analysts at Deutsche Bank and JPMorgan said much of the expected the price increase was already expected before the last halving.
While recent volatility may support this theory, bitcoin bulls believe the bearish trend is temporary.
“It’s normal for a price drop like this to happen after a halving — halvings are incredibly bullish, but bull markets usually don’t start until several months later — for fundamental reasons,” Caitlin Long, founder and CEO of CustodiaBank, said in a post on X in late June.
Mt. Gox Distributions: Mt. Gox Bitcoin Exchange Fails this week began distributing billions of dollars worth of bitcoin to former customers this month. The net effect of this supply increase, which began hit the markets on Fridayis uncertain, with some seeing this as pessimistic and others saying the issue is overblown.
This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.
Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).
The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.
Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.
Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.
Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.
Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.
Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.
U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.
Markets
Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days
Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.
Worldcoin (WLD) Price Analysis
O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.
The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.
Arweave (AR) Price Analysis
Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.
AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.
Price Analysis of Injective (INJ)
Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.
INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.
Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.
ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.
ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment
Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.
According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.
On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.
The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.
Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.
One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.
Markets
Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt
Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?
Posted on July 17, 2024 at 12:00 PM EST.
Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.
In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.
They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?
They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).
Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?
Program Highlights:
- Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
- How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
- Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
- How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
- What are the new updates about Ethereum ETFs and their expected launch?
- Why Solana Hasn’t Performed Significantly Better Since Trump News
- What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
- Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
- What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week
Hosts:
Guest:
- Jack PlattsCo-Founder and Managing Partner of Hypersphere Ventures
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