Mega Chop is Expected in Bitcoin Market Amidst “Continued Appetite” from Big Investors
What’s notable is Bitcoin recovers fast. It actually went from $10k to nearly $60k in just five months. And a similar rally can take us to $250,000 per BTC in July.
The cryptocurrency market continues its up and down movements entering into the weekend following the deep losses in the stock market, which bounced back on Friday.
However, the digital asset still continues to outperform every other traditional asset class by a wide margin. And “if Bitcoin can demonstrate continued resilience, while tech unwinds, it will demonstrate that it has become the lifeboat from a sinking ship,” said Charlie Morris, founder of ByteTree.
For now, BTC/USD is trading around $48k and Ethereum around $1,550. However, the market is still expecting more losses ahead. Trader SmartContracter is pondering a scenario where Bitcoin chops not only bears but also bulls to find its bottom between $38k and $42k. Another trader NebraskanGooner is also expecting very much the same scenario as he says,
“Mega freaking chop. Going to be a while until this correction fully resolves, and then once everyone lets their guard down it's going to moon faster than ever before.”
On-chain activity shows ”very strong” support at the $47,000 price level as it was around here that 500,000 BTC moved. And this level is important to be held in order to avoid a trip down under $40k. The Spent Output Profit Ratio (SOPR) indicator is actually pointing to high HODLing conviction from new investors as coins that were bought this year did not move at a loss during the recent dip, per Glassnode. On-chain analyst Willy Woo said,
“BTC bouncing off super strong support in this region. If it breaks below, ~$40k is the floor price which would be a gift to buyers.”
However, it is worth noting that it doesn't take long for Bitcoin to recover and start to rally back again. The price of BTC actually went from $10k to nearly $60k in just five months. And a similar rally can take us to $250,000 per BTC in July, points out analyst PlanB. ParabolicTrav added,
“Knowing parabolas, the next phase of the parabola should be of a faster pace than the base.”
While the price is chopping, there is no lack of bullish news for Bitcoin with institutions, family offices, and banks jumping on this train. As we reported, JPMorgan is recommending Bitcoin as a “portfolio diversifier” to its clients.
Goldman Sachs also revealed in its recent interview that they have “fielded well over 300 conversations” with corporate treasurers, asset managers, hedge funds, macro funds, banks, insurance, and pension funds. Matthew McDermott, the firm's head of digital assets, told TheBlock,
“You know, we see continued appetite both internally and externally through the private banks.”
“So, yes, we see a huge amount of demand institutionally, but we're also seeing that reflected in the private wealth management space as well.”
The baking giant is also rebooting its Bitcoin trading desk to focus on CME features and non-deliverable forwards.
Crypto firms are also taking advantage of the bigger picture, which is the “super cycle,” and declaring their plans to go public. Bitcoin mining firm Cipher Mining Inc joined in as it plans to go public through a merger with blank-check firm Good Works Acquisition Corp. “to get to market the quickest,” with a valuation of just $2 billion.
Bakkt, a cryptocurrency platform, also agreed earlier this year to go public through a SPAC firm.
Other crypto firms are also pushing ahead with similar plans despite the regulatory uncertainty. The biggest US cryptocurrency exchange Coinbase has moved closer to the listing of its shares on the Nasdaq, with a valuation of $100 billion.
Another crypto exchange Kraken is on track to go public but not this year. However, the company doesn't want to go the SPAC route or with a mere $10 billion valuation, said its CEO, Jesse Powell.