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This week, Bitcoin is chilling around $50,000, constantly trying to break above the psychologically important $50k level with force, but so far, a strong breakout hasn’t been seen. Despite the fresh interest in the market, the funding rate is remarkably low, with the highest currently being 0.0608% on Deribit. Much like the price, which has recovered about 77% from July low, the hash rate has also jumped as much as 55% from early July, when it hit an almost two-year low. Open interest on Bitcoin futures has also reached above 360k BTC, more than $18 billion in USD terms, a level not seen since mid-May. The ATH was in mid-April at $27.68 bln. Despite the decisive rally, QCP Capital pointed to the potential downside risk in the form of Bitcoin reversal not breaking out of range and its volatility remaining relatively muted as the spot struggles to break above 50k. “We expect BTC spot to be sticky around the 47-52k range,” it said adding, it has good resistance at the 61.8% Fibonacci retracement level, which falls at $51,110.
Retail Investor ‘Mania’
However, it’s not just Bitcoin, as Ether is already near its peak of $4,380 after rallying to $3,990 today. Other Altcoins enjoying an uptrend include Arweave, Fantom, Solana, IOTA, Kusama, FTT, Polkadot, and Cosmos, which are up 35% to 135% in the past week. The return of bulls has the total market cap soaring to $2.36 trillion, not far from the $2.55 trillion high on May 12. According to JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou, the previous phase of retail investors’ ‘mania’ into the market was seen between January and mid-May when the share of altcoins rose from 13% to 37.6%. Altcoins’ share is still far from the record high of 55% seen in January 2018, the top of the last bull market. Panigirtzoglou wrote in a note Wednesday,
“At 32.6%, the share of altcoins looks rather elevated by historical standards, and in our opinion, it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend.”
Optimism is High
Besides increasing institutional interest, the decentralized finance (DeFi) sector saw development this year while NFTs accelerated crypto’s mainstream adoption. When it comes to bitcoin, Twitter is also focused on bringing the crypto asset to the masses, starting with the Tip Jar feature, which will allow users to drive tips in BTC using the scaling solution Lightning Network. “Two fundamental factors that are likely behind Bitcoin’s push: Twitter’s potential integration of the coin as a Tip Jar payment option, and the official launch of Bitcoin as a legal tender in El Salvador come Sept. 7,” Petr Kozyakov, co-founder and CEO of global-payment network Mercuryo told Bloomberg.
“While we are expecting the $50,000 price point to hold, Bitcoin buyers are exercising more optimism for even a bigger price gain by year-end.”
Among these bulls is Chainalysis CEO Michael Gronager, who sees the possibility of Bitcoin hitting $100,000 by the end of this year. In an interview with Bloomberg, Gronager said the most stable cryptocurrencies, Bitcoin and Ethereum, are “definitely seeing a trend where they grow year over year, and sometimes they grow faster than others.” While in a bear market, interesting things happen; in a bull market, things can grow even faster.
“So yes, I think we are still in the bull market. I think that we can see above 100k by the end of the year.” “I would be bullish on that as well. Long term. You should say the moon is the limit. We can go beyond that as well so that we can see way higher prices.”
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