News On Bitcoin - Week 32 2024

Weekly update on all things Bitcoin

August 13, 2024

TL;DR

  • BTC is down

  • Bitcoin dominance is up

  • Whales Accumulate 404,000 BTC Amid Market Volatility

  • Metaplanet's $70M Bitcoin Investment Plan

  • Bitcoin Spot ETFs See Major $192.5M Inflows

  • Michael Saylor Reveals $1 Billion Personal Bitcoin Holdings

  • Mox Introduces Bitcoin ETFs in Hong Kong

  • USABTC Proposes Tax-Free Bitcoin Zone

  • Russia Legalizes Cryptocurrency Mining

  • Bitfarms Stock Surges 22% After Q2 Report

  • Marathon Digital Expands Bitcoin Holdings by $124M

Bitcoin Price

Crypto is down this week, with BTC being down 5.0% and ETH down 14.9%:

Bitcoin dominance has increased over the week, rising from 53.06% to a peak of 54.66% and ending at 54.3%. Bitcoin dominance is up due to strong bullish momentum, significant short position liquidations, successful breakouts above key levels, positive market sentiment, and ongoing institutional interest.

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.

Bitcoin speculators are feeling the heat, with 93% of short-term holders (STHs) now facing unrealized losses after a $365 million liquidation.

The recent drop to $49,500 has pushed STHs into their deepest losses since the FTX collapse, with only 7% still in profit.

The market's in panic mode, with the spent output profit ratio (SOPR) hitting historic lows—recent buyers are seeing average losses of 10%.

But it’s not all doom and gloom; some analysts hint that the current prices could be a bargain, as similar dips have sparked rallies in the past.

With leverage being flushed out, eyes are now on on-chain data to see if a recovery is on the horizon.

Bitcoin (BTCUSD) Analysis:

On August 8, 2024, Bitcoin closed at 57,128.00, up 233.93 points. In the short term, it's trading within a horizontal range with support at 55,200 and resistance at 60,800, showing potential weakness.

Medium-term analysis suggests a deceleration in its upward trend, with support at 54,158 and resistance at 69,102.

Long-term, Bitcoin remains in a rising trend, indicating overall positive momentum, with key levels at 45,000 (support) and 70,000 (resistance).

The outlook is cautiously optimistic, with potential targets up to 88,170.

Expected Trading Ranges: Bitcoin (BTC): Support: $45,000 Resistance: $70,000

Market Outlook

The overall Bitcoin market outlook is cautious yet potentially optimistic. With significant liquidations clearing out leveraged positions, there's room for stabilization.

Analysts suggest that current price levels could offer a buying opportunity, but the market remains sensitive to further volatility.

A recovery is possible, but it hinges on positive on-chain and spot market data in the coming weeks.

BTC/ETH ratio has seen an increase:

Over the past 6 days, the BTC to ETH conversion rate has shown a general increase. Starting from 21.55 ETH on August 4, 2024, it rose to 22.86 ETH by August 9, marking an overall increase of 6.11%. Despite some daily fluctuations, including a slight decrease of 1.38% on August 9, the rate has generally trended upwards, reflecting a positive movement in Bitcoin's value relative to Ethereum over this period.

Periodic reminder. Hodling is not easy. If you already worry about -20% dips, then bitcoin is not for you.

— Plan B

Financial News

In the last 30 days, Bitcoin whales have accumulated 404,448 BTC, valued at nearly $23 billion, despite significant market volatility. This large-scale movement of Bitcoin to long-term holder addresses indicates strong confidence in the asset's future. Analysts speculate that traditional financial institutions, governments, or major corporations may be behind this accumulation, possibly preparing for major announcements.

Ki Young Ju, CEO of CryptoQuant, highlights the rising Accumulation/Distribution indicator, suggesting sustained buying pressure. Despite recent price fluctuations, the continued accumulation by whales points to a potential bullish trend, though the risk of a bear market remains if prices stay low.

Japanese firm Metaplanet plans to raise $70 million through a stock rights offering, with most funds allocated to Bitcoin. Inspired by MicroStrategy's strategy, Metaplanet seeks to protect against the yen's volatility and Japan's high debt by increasing its Bitcoin holdings. This move also includes a shift in its struggling hotel business to cater to Bitcoin enthusiasts.

Metaplanet's bold investment positions it as a leading Bitcoin holder in Japan, potentially setting a trend among other Japanese firms. The market responded positively, with the company's stock rising 12% after the announcement, signaling confidence in this strategic financial shift.

Bitcoin spot ETFs experienced a significant surge in inflows on Thursday, reaching $192.5 million, marking the largest in two weeks. This influx followed a sharp dip in Bitcoin's price below $50,000 amid a global market selloff. The BlackRock iShares Bitcoin Trust led the recovery, attracting $157.6 million, while WisdomTree Bitcoin Trust saw a record $118.5 million.

These inflows helped propel Bitcoin back above $60,000, suggesting renewed investor confidence. The rebound indicates that the recent selloff might have been a temporary blip rather than the onset of a bearish trend, with potential for Bitcoin to retest its all-time highs.

Adoption News

Mox, a virtual bank under Standard Chartered, has launched Bitcoin and crypto ETF trading, becoming the first virtual bank in Hong Kong to offer these products. The offerings include spot Bitcoin ETFs in Hong Kong and derivative Bitcoin ETFs in the US, with competitive fees due to Mox's lean infrastructure.

The move aligns with rising retail demand, as a recent survey revealed significant interest in Bitcoin among Hong Kong residents. Mox’s CEO, Barbaros Uygun, stated that the launch empowers customers to access emerging asset classes, potentially setting a new standard for virtual banks in the region.

The USABTC policy group has proposed creating a Bitcoin tax-free Digital Economic Zone (DEZ) in the United States to boost the digital economy while maintaining the dollar's dominance. The DEZ would allow Bitcoin transactions without capital gains taxes but impose a tax on converting Bitcoin back to traditional currency.

This initiative aims to attract investors and stimulate economic growth within a regulated environment. The proposal includes a phased implementation plan, starting with a presidential directive and collaboration with the IRS to establish a legal framework. If successful, the DEZ could position the US as a leader in the global digital economy by 2026.

Michael Saylor, MicroStrategy's executive chairman, disclosed in a Bloomberg interview that he personally owns 17,732 Bitcoin, worth around $1 billion. Saylor reiterated his strong belief in Bitcoin as a premier investment, stating he hasn't sold any and continues to accumulate more, viewing it as a top capital asset for individuals, institutions, and even nations.

Saylor also highlighted shifting political attitudes towards Bitcoin, referencing U.S. Senator Cynthia Lummis's proposal for a Strategic Bitcoin Reserve and former President Trump's advice to "never sell your Bitcoin." He emphasized Bitcoin's value as a long-term investment rather than a currency for everyday purchases.

Mining News

Russian President Vladimir Putin has signed a law legalizing cryptocurrency mining in Russia, defining digital currency mining, mining pools, and mining infrastructure operators. The law allows Russian legal entities and registered individual entrepreneurs to engage in mining, while individual miners can participate if they stay within government-set energy limits.

It also permits trading foreign digital financial assets on Russian blockchain platforms, though the Bank of Russia can restrict certain assets to protect financial stability. Putin emphasized the importance of this legal framework for leveraging digital currencies in Russia's economic development. The law takes effect ten days after publication.

Bitfarms' stock surged 22% after reporting a Q2 loss of 7 cents per share, beating the expected 11 cents. Despite a 16% revenue drop to $42 million due to reduced Bitcoin block rewards post-halving, the company mined 614 BTC worth $37 million. CEO Ben Gagnon emphasized ongoing fleet upgrades and expansion beyond Bitcoin mining into HPC/AI.

The company’s hashrate increased to 11.1 EH/s, with plans to reach over 35 EH/s by 2025, supported by new sites in Pennsylvania and South America. Bitfarms is focused on growth and diversification, positioning itself for significant future expansion.

Marathon Digital Holdings, the world's largest Bitcoin miner, increased its Bitcoin holdings by 2,282 BTC in July, valued at over $124 million. This strategic move brings Marathon's total Bitcoin reserves to 20,818 BTC, worth more than $1.14 billion. Embracing a "full HODL" strategy, Marathon views Bitcoin as a crucial treasury reserve asset.

Additionally, Marathon's Bitcoin production rose by 17% in July, producing 692 BTC, further strengthening its position in the market. Despite market fluctuations and the looming 2024 Bitcoin halving, Marathon remains committed to long-term holding and aggressive mining strategies.

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