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- After Bitcoin’s (BTC) price rose above $40,000 for the first time in over six weeks on July 26, bull market confidence returned to the cryptocurrency industry
- The recently debunked claim that Amazon will accept cryptocurrency payments may have the same impact as PayPal’s statement in 2020 that it will include cryptocurrencies, according to Élie Le Rest, a partner at digital asset management firm ExoAlpha
- In contrast to the volatility in spot and futures markets, the transaction volume and on-chain activity remained relatively quiet, according to Glassnode
After Bitcoin’s (BTC) price rose above $40,000 for the first time in over six weeks on July 26, bull market confidence returned to the cryptocurrency industry. Today’s rise to $40,581 was a continuation of the July 25 breakthrough, which saw BTC price soar to $48,110.
BTC surged to an intraday high of $40,581 on Monday before pulling down to $37,500, according to data, as bulls attempt to turn this resistance zone back to support in preparation for a future move higher. While the move higher gives the appearance of a trend shift, prompting some experts to declare the bull market has resumed, on-chain statistics and permanent funding rates do not completely support this view. Especially because the recent breakthrough might have simply been the consequence of a huge short squeeze.
According to Élie Le Rest, a partner at digital asset management firm ExoAlpha, the recently refuted rumor that Amazon will accept cryptocurrency payments may have the same impact as PayPal’s announcement in 2020 that it would incorporate cryptocurrencies. If the Amazon rumor is accurate, Le Rest believes it may be the spark to start a bull run in H2 of 2021. More than a billion dollars of shorts got liquidated in the past 24 hours, with the bulk of the liquidation occurring in less than an hour, according to Le Rest, who also stated that the current market move could be sustained during the week by volumes coming from players who have waited for a more directional trend on Bitcoin since the end of May.
According to Le Rest, Bitcoin has to break out of the $30,000-$40,000 area it has been locked in for the past two months to confirm this directional trend. Maintaining Bitcoin’s price over $40,000 would indicate that the bear market has ended, and the bull market could restart. As many predict, Bitcoin may get back on track with the Stock to Flow model and hit the $100,000 level by year-end, Le Rest added if Bitcoin maintains its present speed.
Excessive bullishness should be avoided, as evidence from Glassnode shows that numerous bearish risks remain genuine. When Glassnode looked at the futures markets’ directional bias, it discovered that perpetual funding rates have continued to trade negative, indicating that the net bias remains short Bitcoin. According to Glassnode, this indicator in particular helps us identify that Monday’s price rebound is likely connected with an overall short squeeze, with funding rates remaining at even more negative levels despite the price rallying by 30%.
In contrast to the volatility in spot and futures markets, the transaction volume and on-chain activity remained relatively quiet, according to Glassnode. Overall, how on-chain transfer traffic reacts to recent Bitcoin price movement will give us a clearer idea of where the market is going, but as Glassnode points out, it remains to be seen whether on-chain volumes start to pick up in reaction to recent wild price-activity.
The rise of Bitcoin above $40,000 sparked significant rallies in other cryptocurrencies. Ether (ETH) increased by 11% to a day high of $2,433, while Dogecoin (DOGE) increased by 7% to $0.208. Strike (STRK) is up 64 percent, Venus (XVS) is up 55 percent, while VeChain Thor (VTHO) and Ankr are up 20 percent (ANKR). The total value of all cryptocurrencies is currently $1.46 trillion, with Bitcoin commanding 47.4 percent of the market.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
