Bitcoin (BTC) Almost Touches $40K on Rapid Recovery
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Bitcoin (BTC) showed its immense upside potential, after bouncing from weekly lows around $29,000. The leading crypto coin recovered a few key positions above $30,000 over the weekend, before shooting toward $40K.
BTC stopped short of that range, but overall managed to recover just under $39,000, up more than 11% overnight. Trading activity increased toward $33B in 24 hours. The recent BTC climb happens despite the slide in USDT supply below 62B, as other dollar-pegged stablecoins take the slack.
The BTC price recovery did not happen in isolation, instead taking most altcoins along for a ride.
The ETH market price revisited the $2,300 range after slipping to $1,800. Most altcoins pushed off their bottoms, though for now BTC takes the lead in recovery.
Amazon to Accept BTC Payments
The triggering news that extended the BTC rally saw Amazon vowing to accept BTC and other digital coin payments toward the end of 2021.
Based on insider information, Amazon is not only exploring cryptocurrency payments, but actually has a plan for adopting some of the leading assets in an ongoing integration program.
BTC payment acceptance has fluctuated over the years, with some businesses readily adopting crypto wallets. Others have broken up their crypto payment systems in the past, mostly due to price fluctuation, hard fork uncertainty or hefty reporting requirements.
China Ban Effect Loses Power
The recent dip of BTC prices extended from the initial news of restrictions on mining farms in some Chinese provinces. After the rapid crash of mining activity, the price slide erased more than 50% of BTC prices.
BTC threatened to break down more rapidly, with fears of revisiting the $12,000 range. Some of the potential paths for BTC allowed for a breakdown below the prices predicted by the stock-to-flow model.
However, weeks after the shakedown, BTC showed it is capable of a fast return, sparking expectations for a new rally.
Long-Term Holders Back in the Green
Holders that acquired BTC in the range between $29,000 and $38,000 are back in the green. This range coincides with peak interest in building up corporate BTC portfolios. The BTC price returned to the range at which Tesla, Inc. acquired most of its coins.
The recovery happened just days after a prominent crypto talk between Twitter’s founder Jack Dorsey and Elon Musk, tech king of Tesla.
The Amazon cryptocurrency plans further added to the positive attitude, revealing the inherent appeal of BTC as a financial tool.
The BTC market price also rose after the recent Grayscale Bitcoin Trust share unlocking failed to depress the market price. Still, GBTC shares lag the real BTC appreciation, trading at $27.19. This price is the equivalent of $27,190 per BTC, showing a significant discrepancy between mainstream investment and BTC spot prices.
Can the BTC Rally Survive
The recent BTC rally still happens on top of a generally fearful sentiment. BTC still failed to go over the $40,000 mark.
BTC mining has returned to a stable range above 100 EH/s, with no exponential growth in the past month. BTC futures volumes remain subdued, though the past day also liquidated $1B in short positions.
BTC has shown it is also capable of liquidating long positions, last week’s dip under $30,000. Currently attitudes to BTC are different for active traders and potential long-term holders. For traders, the increased volatility may mean new liquidations. But in the long term, BTC is giving some signs for a continued rally based on the stock-to-flow model.
Can ETH Improve the Market
ETH expanded to $2,362.00, up more than 23 in the past week alone. ETH trading volumes remain relatively high. The downhill effects of ETH appreciation are also immediately spreading.
The value of DeFi tokens expanded in the course of a few days, bouncing off a low of $62B. Now, the total value of DeFi tokens is once again above $82B, with most value concentrated in the biggest protocols like Uniswap, Maker, Polygon and others. Smaller tokens are also managing to outperform in the short term.
The DeFi space has managed to recover after the recent market shakedown, when briefly the value of assets under management crashed to a low of $43B. Within days, the total value locked in DeFi protocols now has a notional value of $62B.
Decentralized projects have shown significant robustness. The recent white hack against THORChain (RUNE) was easily absorbed, and the asset regained 15% overnight to return to a price range above $4.
ETH and the DeFi space will get a boost from the fast-approaching deadline for the London upgrade of the Ethereum network. The run-up to August 4 may boost the attention to ETH with the potential to revisit higher price positions.
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