Crypto newsletter: Bitcoin breaks $50k for first time since mid-May

• Bitcoin above psychological 50k level
• Blackrock invested nearly $400M in Bitcoin mining stocks
• PayPal will allow clients in the UK to buy, hold and sell cryptocurrencies

The last seven days were great for the cryptocurrency market. BTC kept rising after the already very positive performance of the past week. Bitcoin was able to get to 50’000 USD for the first time since May, providing an additional boost that the market needed in order to go higher. Altcoins are widely following the major cryptocurrency, and adding fuel to the rally. Bitcoin's market dominance increased slightly to 43.8%. The capitalization of all digital assets in circulation rose to 2.15 trillion. By contrast, the combined crypto capitalization dropped below $1.3 trillion in July. Meanwhile an average daily trading volume is registered at $114.6 billion. 

Institutional interest in Bitcoin is on the rise

The main cryptocurrency reached levels unseen since May this year amid rising interest from institutional investors. Wells Fargo – one of the biggest US banks registered a new, pooled investment fund that offers its wealthy clients indirect exposure to Bitcoin. Meanwhile Blackrock, the world’s largest asset manager, had nearly $400 million invested in bitcoin mining companies at the end of the second quarter, according to the SEC filing. Also news of PayPal expanding its crypto offering to customers from the United Kingdom has sent Bitcoin to a 3-month high near $50,000 mark. The process will begin this week and should be available to all eligible customers within the next few weeks. The rollout is the first expansion of PayPal's crypto offering outside the U.S. The company has not yet allowed users to move crypto holdings off-platform, though this stance may change. Jose Fernandez da Ponte, vice president of blockchain, crypto and digital currencies, said at Consensus 2021 in May that a withdrawal function is in the works.

On the other hand, the Bitcoin Fear & Greed Index, which is based on a multifactorial sentiment analysis, has flipped from “extreme fear” to “extreme greed” in less than a month which may herald potential downward correction.

The Crypto Fear & Greed Index reached a level not seen since April 2021, just before the recent downward correction started. Source: alternative.me

Bitcoin price is testing a resistance zone ranging between $50,000 handle and the 61.8% retracement of the downward move launched in mid-April 2021. In case it fails to break above this hurdle, price may pull back towards the $45,000 mark, where the lower limit of the market geometry can be found. On the other hand, breaking above $50,000 would pave the way for a test of the $55,000 swing area. Source: xStation5

Ethereum price is testing major resistance zone

Ethereum price rallied 36% from the beginning of August and is currently testing a major resistance zone at $3345.00. Potential break higher would open the path to the subsequent barriers at $3,790 and all-time high at $4,355. On the other hand, if sellers manage to regain control, then downward correction may be launched towards psychological support around $3000.00

Ethereum, D1 interval. Source: xStataion5

Adding credence to bullish outlook is the exchange reserve metric, which shows a reduction from 19.89 million ETH on July 22 to 19.25 million last week and points out that long-term holders are optimistic about Ethereum price performance, which explains their decision to move their holdings off centralized entities. Source: CryptoQuant