After a turbulent six weeks that began in June, when Bitcoin’s value fell by more than 15%, the currency is making a comeback. As of this writing, prices continue to record highs, hovering above $62,000.
Bitcoin gets rid of weakness
According to one analyst, Signal According to metrics provided by CryptoQuant, Bitcoin is trending higher. It could see further gains in the coming weeks or months. Technically, Bitcoin is in a bullish breakout formation, with a close above $60,000 crucial to boost confidence.
In the analysts’ preview, the past few weeks have seen Bitcoin rally in the face of a wave of fear, uncertainty and doubt. Notably, the German authorities’ decision to dump 50,000 Bitcoins worth billions of dollars has negatively impacted sentiment.
The situation was exacerbated when Mt. Gox creditors announced that they were planning to distribute the coins in July, not October. As of July 16, Kraken reportedly sent an email to recipients stating that they were planning to distribute BTC from Mt. Gox in the next few days.
Bitcoin’s price decline for much of June, which culminated in a sharp selloff in early July, led to outflows from Bitcoin ETFs. Unlike previous months, when investors were eager to gain exposure to Bitcoin ETFs, the decline prompted some holders to redeem their shares, accelerating the downward trend.
At about the same time, the US Federal Reserve announced that it would cut interest rates only once this year, not three times as economists had expected. this This means that interest rates will remain higher than expected, Net bearish for risky assets like Bitcoin and cryptocurrencies.
The Big Shift: Bitcoin is trading at a higher price, and miners are feeling relieved
But the shift came this weekend. According to analysts, the assassination attempt on Donald Trump has increased the chances of the former president succeeding Joe Biden. Trump has changed his stance on Bitcoin and cryptocurrencies, and even encouraged mining activity in the country.
The rally over the weekend comes on the heels of a surge in liquidity, especially for leading stablecoins like USDT and USDC. Now, with prices rising, the analyst also notes that short-term holders (STHs) are back in the green after prices topped $62,700.
Higher prices also translate into higher profits for miners. As it stands now, miners are no longer in the “ultra-low wage” zone. Because of this, few people will have an incentive to sell their coins.
The rising value also means that Coinbase customers are paying a premium to acquire BTC. This suggests that momentum for further gains is gradually building, which is a huge development for buyers.
Featured image from Canva, chart from TradingView