Less than 24 hours after BlackRock, the world’s largest asset manager, submitted a spot bitcoin ETF application, Bitcoin surged back above $26,000 and hit its highest level in a week, with a 24-hour increase of about 4%. Ethereum rose 3% to $1,718.06. The altcoin market also received a boost, with Solana and Cardano up 4.5% and 2%, respectively, BNB up 2.75%, Litecoin up 3%, and Uniswap token up 4%.
BlackRock’s “boost”
If the SEC approves it, BlackRock’s iShares Bitcoin Trust will become the first ETF in the US to be allowed to track the price of Bitcoin, rather than futures contracts related to cryptocurrencies. MicroStrategy’s stock has risen more than 5%, and Grayscale’s GBTC discount has narrowed, adding positive sentiment to the cryptocurrency market.
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Gustavo Schwenkler, an associate professor at Santa Clara University’s Leavey School of Business, commented, “One important purpose of Bitcoin as an asset class is diversification. Its risk profile is different from that of traditional financial markets. If this is approved, I can expect to see more institutional investors adding Bitcoin to their portfolios…this will institutionalize the market in ways that are currently impossible.”
So far, the SEC has rejected all companies’ spot bitcoin ETF applications. BlackRock filed its document after the SEC sued its cryptocurrency custody partner, Coinbase, for violating securities laws, leading many to speculate about BlackRock’s intentions.
Mark Connors, head of research at Canadian crypto asset management firm 3iQ, said on social media that BlackRock’s timing of the application may reflect its “implied support” when facing legal action from the US Securities and Exchange Commission. In BlackRock’s proposed iShares Bitcoin Trust, Coinbase will serve as the custodian of Bitcoin in the trust.
Connors wrote: “The timing of BlackRock’s filing can be viewed as a way to allay regulatory concerns by reiterating their commitment to Coinbase and a spot bitcoin trust that is regulated in the same action, which is undoubtedly an advantage for Coinbase and the entire industry as the document establishes clear processes for custody, liquidity, and price monitoring, which will have a positive impact on Coinbase’s business prospects and industry adoption.”
Bitcoin Dominance on the Rise
As previously reported, on June 14, 2023, the US Federal Reserve FOMC kept interest rates steady at 5-5.25% after ten consecutive hikes. The next day, the European Central Bank announced a 0.25% hike in its three main interest rates, which took effect on June 21, 2023. These developments led to a sell-off of Bitcoin, pushing it to a three-month low.
However, the price of BTC quickly rebounded from the bottom, sparking another bullish sentiment. Bitcoin’s market dominance has reached its peak since July 2021, indicating that traders and investors are once again interested in the leading cryptocurrency.
Recent TradingView data shows that Bitcoin’s dominance, or the percentage of BTC’s total market value in the cryptocurrency market, has reached 49.8%. This is a level not seen since July 2021, when Bitcoin’s dominance exceeded 48%.
It is worth noting that in April of this year, Bitcoin’s dominance briefly touched 48.83%, and then oscillated within a certain range.
Is the bearish momentum fading?
According to Yan Allemann, co-founder of Glassnode, the current stage of this trend is a retest of the $26,200 level. Allemann believes that this is an important stage, as it will determine whether Bitcoin can break through the previous resistance level and move towards the next target of $27,200.
Market analyst Crypto Con believes that one of the most accurate indicators of whether Bitcoin is bullish or bearish is the 140-day moving average (140DMA), which indicates that BTC’s price is below this key level. The 140DMA is a widely watched indicator in the cryptocurrency market, as it clearly shows whether Bitcoin is in a bullish or bearish phase.
When the price of BTC is above the 140DMA, this is a bullish signal, indicating that the cryptocurrency may continue its upward trend. Conversely, when the price is below the 140DMA, this is a bearish signal, indicating that the cryptocurrency may experience a downturn.
Crypto Con suggests that from a technical chart perspective, BTC needs to stay at the $26,000 level throughout the weekend in order to continue its upward trend, and that the price holding above this level may indicate that BTC is poised to rebound next week.
Specifically, if the BTC price breaks the immediate resistance level at $26,060, it would indicate further bullish buying activity. Breaking through $27,343 would push the price up to the next resistance level at $28,090. Conversely, if BTC falls from its current position and drops below $25,550, it would suggest that the bulls are retreating and could fall to the important threshold of $20,000.
Author: BlockingBitpushNews Mary Liu
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