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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
Bitcoin (BTC), the world’s leading cryptocurrency, has reversed its downward trend and regained momentum around the $59,380 level, reaching an intra-day high of around $60,500.
BTC dropped below $58,000 on Monday morning due to a pause in institutional buying, but it has since recovered its losses.
Recent developments, including the positive movement in Ethereum and Bitcoin exchange-traded funds (ETFs), have contributed to this recovery.
On August 12, 2024, US spot Ethereum ETFs saw a net inflow of $4.9 million, marking a rebound after a three-day decline.
In contrast, Bitcoin ETFs saw even more notable activity, with the 12 spot Bitcoin ETFs in the US receiving a total net inflow of $27.87 million on the same day.
Furthermore, Marathon Digital Holdings, a major Bitcoin mining firm, has announced a $250 million private offering of convertible senior notes.
This move aims to increase its Bitcoin holdings for the long term but has sparked debate over the associated risks.
This also contributed to BTC’s recovery by boosting investor confidence and signaling long-term commitment.
The recent developments in Ethereum and Bitcoin ETFs highlight the dynamic nature of the cryptocurrency market. On August 12, 2024, US spot Ethereum ETFs saw a $4.9 million net inflow, rebounding from a recent decline.
Despite Grayscale’s Ethereum Trust (ETHE) experiencing no inflows for the first time in 14 days, other funds like VanEck’s ETHV and Fidelity’s FETH saw mixed results. The total daily trading volume for spot Ethereum ETFs surged to $286 million, up from $166.9 million.
On the Bitcoin side, spot Bitcoin ETFs saw a $27.87 million net inflow, led by Ark and 21Shares’ ARKB fund. However, Bitwise’s BITB and Grayscale’s GBTC funds faced outflows.
These changes suggest investors are adapting to market fluctuations, with varying strategies and levels of interest in cryptocurrencies.
Therefore, the news of significant inflows into Bitcoin ETFs and increased trading volumes likely boosted BTC’s price by signaling strong institutional interest and investor confidence, while the mixed results in Ethereum ETFs suggest a cautious yet evolving market sentiment.
Marathon Digital Holdings, a leading Bitcoin mining firm, has announced a $250 million private offering of convertible senior notes. These notes can be converted into cash, Marathon’s stock, or a combination of both.
The funds will be used to acquire more Bitcoin and expand the business. This move follows Marathon’s recent $100 million Bitcoin purchase, raising its total holdings to 20,000 BTC, valued around $1.28 billion.
Despite these aggressive investments, some experts have raised concerns. Ryan Condron from Lumerin cautions that Marathon’s strategy might be overly speculative, echoing issues faced by Core Scientific in 2022.
Wes Levitt from Alpha Transform Holdings points out that although Marathon’s approach is similar to MicroStrategy’s, its low cash flow and the highly competitive mining landscape could lead to debt management issues, especially post-Bitcoin halving.
To mitigate risks, Marathon is also mining other cryptocurrencies like Kaspa to diversify its revenue sources.
Hence, this could positively impact BTC’s price by signaling strong institutional support and confidence. However, concerns about speculation and debt management may create mixed investor reactions, influencing price volatility.
Bitcoin Faces Strong Resistance Near $59,600 – Bearish Outlook
Bitcoin (BTC/USD) is currently trading at $59,160, down 0.69% in the last 24 hours. On the 4-hour chart, Bitcoin is encountering strong resistance near the $59,600 level, which is reinforced by a downward trendline. This trendline has the potential to push Bitcoin’s price lower.
Additionally, the 50-day Exponential Moving Average (EMA), which is around $59,500, is also acting as a resistance point, supporting the bearish outlook. The Relative Strength Index (RSI) is at 47, indicating a bearish bias as well.
A series of doji and spinning top candles have formed, signalling indecision among investors. This suggests that resistance around the $59,650 level is solid, while support lies near $57,700.
If Bitcoin fails to break above $59,650, we could see further downside, with the next support levels at $57,700 and $57,000.
Conclusion: Bearish below $59,900. A break above this level could shift the bias to bullish.
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