Bitcoin, Ethereum, and other cryptocurrencies have recently experienced a solid rise in price. Bitcoin, the world’s most popular crypto is up by around 10% just this week.
This week, Noelle Acheson, Head of Market Insights at Genesis, shared her opinion on the bullish crypto market. Acheson said the price jump from this past weekend was driven by short-covering:
“… but what’s interesting is the positive momentum that brought the market to a level where those short positions needed to be hastily unwound, and the fact that the market seems to be holding these new levels rather than settling back down once the structural moves had been absorbed,” said Acheson.
She said there are several factors behind the market leaning bullish:
- There is a general improvement in sentiment. The Genesis trading desks started commenting last week that they were seeing a more bullish tone, and some derivative market metrics started flashing signals. BTC futures open interest is one of them, CME 1-month annualized BTC basis is another – already on Friday, both were at their highest levels so far this year.
- We have also seen some significant signs of growing institutional support – just over the past 10 days, we’ve had statements from Goldman Sachs, Blackrock, Cowen, Bridgewater and
- Virtu, all signaling growing conviction that the crypto markets are worth dedicating more resources to.
- We have the continued buying support from Terra’s Luna Foundation Guard.
- We’re approaching the month and quarter end, which could be triggering some position build-up.
- There are almost daily reminders in headlines of the value of a seizure-resistant, easily portable, independent store of value, and this is likely to continue to boost BTC interest.
- Additionally, the approach of Ethereum’s merge is galvanizing interest in the potential impact on ETH’s price.
- Throughout the past few weeks, which have been relatively lackluster in terms of price movement, accumulation behavior has continued, with over 75% of BTC held in what are considered “illiquid” addresses (those that spend less than 25% of incoming BTC) and over 70% held in what are considered “long-term holder” addresses (those that have held for at least five months).”
Why regulatory risk remains, from a macro perspective – the long run looks solid. At least for now.