Bitcoin saw a drastic 10% drop over the weekend, but most of the overall movement has already been erased. Now the largest cryptocurrency is already gaining more than 4.5%, while Ethereum has recorded more than 5% gains. Both cryptocurrencies reacted to positive reports from Hong Kong. Why such a rebound?
- Firstly, the market does not expect a radical Israeli counterattack on Iran, leading to a suspension of rally in oil. In addition, the reaction of the financial market is very calm, which may lead to renewed interest in risky assets and at least a temporary shift away from the US dollar - if we will not see escalation in the Middle East.
- Secondly, and crucially for Bitcoin, today the Hong Kong Securities and Futures Commission approved spot Bitcoin and Ethereum ETF applications from major applicant financial institutions. This includes China Asset Management, Bosera Capital and HashKey Capital Limited. The decision came 5 days before Bitcoin's scheduled halving and is likely to lead to an even greater reduction in supply.
- More ETFs will attract more 'buyers' to the spot market. Matrixport estimates that the new ETFs will bring about $25 billion in demand to the market. That's more than 10% more than all the BTC currently accumulated in the Grayscale Bitcoin Trust (about $22 billion) and almost 40% more than the assets in the BlackRock Bitcoin Trust (about $18 billion).
Bitcoin (D1 interval)
Bitcoin has had a near 20% correction (in line with the average size of the others, from 2023), but support at $60,000 has already been strongly defended twice, as we can see in the long shadows of the candles. In addition, these levels are supported by the 23.6 Fibonacci retracement of the upward wave from the fall of 2022. Now the price is struggling to break through the SMA50 (black line) and if the bulls manage to break the trend above $67,000 the base scenario is a return to growth trend.
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Source: xStation5
Ethereum (D1 interval)
The second largest cryptocurrency, Ethereum, halted declines at the level of the 38.2 Fibo retracement of the upward wave from the fall of 2022, which further emphasizes the still higher volatility susceptibility to BTC itself. So far, Ethereum has managed to rise about 450% from the June 2022 minima, at a time when Bitcoin, with a more stable growth, has made a similar rise from the fall 2022 minima. Historically, however, ETH has only performed better than Bitcoin 'after the halving' scheduled for April 20, with the dollar and a different liquidity situation than in the 2020 - 2021 cycle putting additional pressure on altcoin interest so far. The SMA50 average is now the main resistance and is located around $3500 per token
Source: xStation5
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