Daily News | Bitcoin Surges on US ETF Optimism, South Africa Tightens Crypto Rules; Global Stocks Subdued During US Holiday
Crypto Daily Digest: Bitcoin Bulls Drive Market Surge Ahead of July 4, South Africa to Require Crypto Exchange Licenses
Bitcoin (BTC) investors took advantage of light market liquidity ahead of the July 4 holiday, pushing the cryptocurrency’s price to new highs for the year. On Monday, Bitcoin rose by 1.8%, reaching $31,159, just below the one-year high of $31,410, although on Tuesday it retreated back to $30,768, representing a 1.3% drop.
This surge is driven by renewed Optimism surrounding the potential approval of a Bitcoin exchange-traded fund (ETF) in the United States. BlackRock has recently refilled paperwork with the Securities and Exchange Commission (SEC), adding new details to its ETF proposal. The market sentiment remains bullish, with significant gains observed in crypto-related companies such as Coinbase and MicroStrategy.
In contrast to the increasing demand, the supply of Bitcoin and ether (ETH) on cryptocurrency exchanges has experienced a decline in June. This drop is primarily attributed to heightened regulatory pressures and security concerns, leading investors to favor self-custody of their digital assets.
According to a report from Goldman Sachs, bitcoin supply decreased by 4%, reaching its lowest level since November 2020. Similarly, the supply of ether slid by 5.8%, reaching levels not seen since May 2018. These trends reflect investors’ preference for holding their assets securely, as well as the shift towards staking ether instead of passively keeping it on exchanges.
Bitcoin miners are capitalizing on the current price surge by selling their cryptocurrency holdings. Grayscale’s June newsletter highlighted that the percentage of miner revenue sent to exchanges has reached record highs in recent weeks. With an 80% rally in Bitcoin’s value this year, miners are taking advantage of the favorable market conditions.
Miner revenue sent to exchanges has reached an all-time high in 3 years - Data per Glassnode
However, some miners, especially those in Texas, U.S., have faced challenges due to power cost surges and curtailments during heat Waves. Additionally, the upcoming halving event in 2024, which reduces mining rewards, adds further pressure to their operations.
Meanwhile, Cameron Winklevoss, co-founder of Gemini crypto exchange, has presented a “final offer” in the debt-restructuring negotiations with Genesis, a bankrupt digital-asset firm owned by Digital Currency Group (DCG). Winklevoss expressed frustration over DCG’s delays in repaying Genesis creditors, including customers of Gemini’s Earn program, and the missed $630 million payment. Winklevoss posted an “Open Letter to Barry Silbert” on Twitter, outlining a plan for $1.5 billion in forbearance payments and fresh loans denominated in dollars, bitcoin, and ether. Failure to accept the deal by the July 6 deadline may result in lawsuits against DCG and Silbert personally, as well as potential default and non-consensual debt-repayment plans.
In a related development, South Africa’s Financial Sector Conduct Authority (FSCA) has announced that crypto exchanges in the country must obtain licenses by the end of 2023. The FSCA has already received approximately 20 license applications since opening for submissions, with more expected before the November 30 deadline. Failure to operate with a license past the deadline could lead to enforcement actions, including fines or closure.
Bitcoin (BTC) $30,807 (+0.13%) - Neutral Outlook
As mentioned earlier this week, there was a distribution structure that failed on June 30 within a four-hour timeframe. This was followed by an accumulation structure that needed further observation. As of Wednesday, the potential accumulation structure has now entered the Uptrust Action (UA) phase. This suggests that the expected next move, as demand decreases and volume decreases, is a retest of the Selling Climax (SC) zone between 30070-29680. The purpose of this retest is to establish the Secondary Test as a Sign of Weakness (stSOW) phase, followed by additional accumulation by Smart Money. It’s important to note that the price of BTC might drop as low as 29300, which is a significant monthly level.
Overview:
- Closest daily support zone: 30025 - 29475
- Closest daily resistance zone: 30690 - 31015
- Key Level: 29300 (Monthly High of Dec. 2020)
Daily Resistance zones
- 30690 - 31015
- 31530 - 32255
- 33100 - 33600
Daily Support zones
- 30025 - 29475
- 29095 - 28420
- 27970 - 27265
Macro: Holiday Lull in US, European Real Estate Surges, Asian Equities Face Subdued Trading
As the U.S. entered its holiday season, the world’s attention has been shifted to Europe and Asia. Trading in global stock markets was subdued due to the Independence Day holiday in the United States.
Real estate stocks led the gains in Europe, with strong performances from companies like Castellum AB and Warehouses de Pauw CVA. Investor interest was also sparked by deal activity, as Vienna-based OMV AG experienced a significant surge following reports of talks with Abu Dhabi to establish a chemicals and plastics company valued at over $30 billion. However, shares of Casino Guichard-Perrachon SA were temporarily suspended after receiving offers from Czech billionaire Daniel Kretinsky and a group led by telecom billionaire Xavier Neil.
Amidst the positive market sentiment, concerns about higher interest rates and a challenging economic backdrop have prompted caution among investors. Strategists from Citigroup Inc. and Goldman Sachs Group Inc. have warned about the risks to US stocks, citing extended positioning and the potential impact of rising interest rates. These factors have led to a more measured approach among market participants.
n the energy sector, Brent crude traded near $76 per barrel as traders assessed the effects of output cuts. Saudi Arabia confirmed its intention to extend a unilateral supply reduction of 1 million barrels per day into August, which was widely anticipated by traders. Russia also announced a reduction in exports, while Algeria planned more modest curbs.
In Asian markets, futures indicate a lower opening following the US holiday, leading to subdued trading. Major currencies have remained relatively stable. Investors in Asia will be closely watching the Caixin China purchasing managers’ index for insights into the health of the world’s second-largest economy. China’s stock market has underperformed global and regional benchmarks this year, and its currency has faced downward pressure.
Looking ahead, market participants eagerly await the US nonfarm payrolls report, which will provide valuable clues about the trajectory of monetary policy. This report, scheduled for release on Friday, will be a significant event for the markets and could further shape investor sentiment.
