News On Bitcoin - Week 27 2024

Weekly update on all things Bitcoin

July 15, 2024

TL;DR

  • BTC is down

  • Bitcoin dominance is Up

  • Bitcoin Price Drops on Mt Gox Repayments

  • German Gov’t Moves $172M in Bitcoin

  • Bitcoin Core Enhances Security Disclosure Policy

  • Launch of Tokenized US Treasury Bonds on Bitcoin Layer-2s

  • Global Bitcoin ATM Network Shrinks

  • Bitcoin Core Enhances Security Disclosure Policy

  • Bitcoin's Drop Leaves Few Mining Rigs Profitable

  • Largest European BTC Miner Northern Data Plans $16B IPO

  • CleanSpark Exceeds Mid-Year Target with Georgia Expansion

Bitcoin Price

Crypto is down slightly this week, with BTC being down 7.0% and ETH down 12.1%:

Bitcoin dominance has been increasing over the week, starting at around 50.81%, topping at 52.25% and ending the week at around 51.7%. Capital often starts to flow into ETH and other altcoins as the price is increasing for more risk-on assets as well, causing a lower Bitcoin dominance as we have started to see over the course of multiple weeks.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

The cryptocurrency market shows mixed trends: Bitcoin faces potential declines across all time frames, while Ethereum's momentum weakens after breaking its upward trend. Caution is advised amid these technical challenges.

Bitcoin Analysis: Bitcoin (BTC) closed at 55,198.00 on July 5, 2024, down 3,909.79 points. The cryptocurrency has broken the floor of its falling trend channel, signaling further declines. Resistance is at 60,700 points, with the RSI below 30, indicating strong negative momentum. Negative volume balance suggests aggressive selling, with potential short-term corrections but an overall bearish outlook.

Expected Trading Ranges

Bitcoin: Short-term 45,929-60,700 points; medium-term 31,000-67,000 points.

Market Outlook

Bitcoin (BTC) faces a challenging technical landscape across short, medium, and long-term perspectives. Recent trends show a breakdown from established channels, with short-term support breaches and a persistently low Relative Strength Index (RSI) indicating ongoing bearish sentiment.

Resistance levels at 60,700 and 57,403 present barriers to upward movements in the short and medium terms, while a long-term double top formation suggests potential declines towards 45,929, supported by a strong base at 31,000. Overall, Bitcoin's technical indicators suggest a predominantly negative outlook, advising caution amidst current bearish momentum.

BTC/ETH ratio has seen an increase.

Over the past six days, the BTC to ETH conversion rate has fluctuated. Starting at 18.25 ETH on June 30, 2024, it increased to 19.00 ETH on July 5, 2024, marking a notable rise of 4.11%. However, following this peak, the rate slightly decreased to 18.99 ETH on July 6, 2024. Despite this minor decline, the overall trend for the period shows an increase in the BTC to ETH rate by 3.45% from June 30 to July 6, 2024.

Financial News

Bitcoin's price plummeted below $55,000 following Mt Gox's commencement of creditor repayments, marking a pivotal moment after the exchange's 2014 collapse. As Mt Gox began distributing approximately $9 billion in owed funds, Bitcoin saw a sharp 6% decline, hovering near $54,000.

The move sparked broader market turmoil, with the crypto sector shedding over $170 billion in 24 hours. Concerns intensified as Mt Gox transferred 47,000 Bitcoin, valued at $2.7 billion, potentially increasing selling pressure. Despite expectations of heightened volatility, analysts remain divided on the long-term impact, emphasizing that most creditors are unlikely to flood the market with recovered assets.

A crypto wallet linked to the German government transferred over 3,000 Bitcoin, worth $172 million, to various locations, including Coinbase, Kraken, Bitstamp, and an unknown wallet. On July 4, blockchain investigator PeckShieldAlert reported a $75 million transfer of 1,300 BTC to these exchanges, while another 1,700 BTC went to an unidentified address.

These movements, alongside ongoing sales from the German and U.S. governments, could increase Bitcoin selling pressure. Since February 2024, the German government wallet has significantly reduced its 50,000 BTC holdings, impacting the market.

Tron founder Justin Sun has offered to buy the German government's $2.3 billion Bitcoin holdings off-market to minimize negative market impacts. Announced on July 4 to his 3.5 million followers, Sun aims to prevent further price drops caused by the government's ongoing Bitcoin sales.

The German government-linked wallet, suspected of holding Bitcoin seized from the pirate site Movie2k, has transferred significant amounts to various exchanges. These sales have raised concerns about continued downward pressure on Bitcoin prices. Sun's proposal seeks to mitigate this risk.

Adoption News

Hamilton, a crypto startup, has introduced tokenized US Treasury bonds, Hamilton U.S. T-Bills (HUST), on Bitcoin layer-2 blockchains like Stacks, Core, and BoB. The launch, claimed to be a first, aims to combine the stability of the Bitcoin network with the reliability of the US dollar.

This move enhances the Bitcoin network’s scalability and functionality, providing a yield better than stablecoins. Hamilton's CEO, Kasstawi, emphasizes the historic step towards financial independence and exposure to emerging markets.

The global Bitcoin ATM network decreased by 334 machines in under 40 days, primarily impacting the US and Europe. In June, 107 Bitcoin ATMs went offline, ending a 10-month streak of growth. By July 5, an additional 227 ATMs were removed, with the US losing 182 in June and 239 in early July.

Europe saw a reduction of 29 ATMs, while Australia added 77 new machines. This decline may be due to global crackdowns on financial crimes, despite Bitcoin Depot reporting steady revenue growth independent of Bitcoin price fluctuations.

Bitcoin Core developers have launched a new policy to bolster the handling and transparency of security vulnerabilities within the Bitcoin network. Led by prominent developer Antoine Poinsot, this initiative aims to dispel misconceptions about the software's bug-free status and improve communication with the community.

The policy categorizes vulnerabilities by severity—from low to critical—and outlines disclosure timelines to ensure timely and comprehensive information. Poinsot and his team have already begun implementing the policy, with disclosures scheduled for upcoming Bitcoin Core versions. This proactive approach not only aims to fortify network integrity but also encourages broader participation in safeguarding Bitcoin's ecosystem through responsible vulnerability reporting.

Mining News

Bitcoin's recent price drop to $54,000 has left only five mining rigs profitable, indicating a potential bottom for the market, according to F2Pool. These rigs, primarily Antminer models and one Avalon rig, remain viable as long as Bitcoin stays above $53,100, highlighting the intense operational costs miners face amid declining profitability.

Miners, who provide essential computing power to blockchain networks, continuously sell their BTC rewards to sustain operations, a process exacerbated during market downturns like the recent one.The situation underscores the financial strain on miners, with operational expenses exceeding mining rewards for most rigs.

Northern Data AG, Europe’s largest Bitcoin miner, is gearing up for a substantial IPO in the U.S. by mid-2025, aiming to raise between $10 billion and $16 billion. This move signifies a strategic shift into artificial intelligence (AI) and cloud computing, areas seen as critical for future growth amidst challenges in the Bitcoin mining sector.

Founded as Northern Bitcoin AG, the company has expanded beyond mining to include robust AI and cloud computing divisions under Taiga and Ardent, respectively, preparing to capitalize on these burgeoning markets. The IPO on Nasdaq will highlight Northern Data’s transformation into a diversified tech powerhouse, leveraging its recent debt financing and partnerships with Tether to enhance AI capabilities.

CleanSpark, a prominent Bitcoin mining firm based in Nevada, exceeded expectations in June by achieving a 6.7% increase in bitcoin production, mining a total of 445 BTC. This milestone was propelled by the company's strategic acquisition of five new mining facilities in Georgia, enabling CleanSpark to surpass its mid-year hashrate target of 20 exahashes per second (EH/s).

CEO Zach Bradford emphasized the significance of this achievement, highlighting the company's focused approach amidst industry challenges and its current hashrate standing at 20.4 EH/s, making CleanSpark the third-largest Bitcoin miner globally. The expansion in Georgia added 60 megawatts (MW) of infrastructure, immediately boosting CleanSpark's hashrate by 1.7 EH/s, with expectations to reach an additional 2 EH/s once fully operational.

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