(Kitco News) – Cryptocurrencies got the week off to a hot start in early trading on Monday after Bitcoin (BTC) spiked to $70,000 as traders digested the weekend comments from presidential candidate Donald Trump, who said he intends to make BTC a strategic reserve asset if re-elected president.
Trump made the comments at the Bitcoin 2024 Conference in Nashville, Tennessee on Saturday, following similar comments by independent presidential candidate Robert F. Kennedy Jr. on Friday.
“The Bitcoin Conference in Nashville over the weekend was nothing short of eventful,” said analysts at Secure Digital Markets. “Former President Donald Trump delivered a highly anticipated speech, targeting Democratic lawmakers including Senator Elizabeth Warren, SEC Chair Gary Gensler, and the Biden administration. Trump criticized these officials for allegedly harming the industry by failing to provide clear regulations. He also announced his policy to retain the 210,000 Bitcoins currently held by the U.S. government, proposing the establishment of a National Strategic Bitcoin Reserve.”
Bitcoin briefly pulled back to $66,650 after Trump’s speech as traders moved to ‘sell the news’ of the highly anticipated announcement, but saw a resurgence in buying early on Monday that pushed the top crypto to resistance at $70,000 as sentiment shifted higher and traders looked to open fresh long bets.
“Bitcoin is making another attempt to break through the upper boundary of its trend channel that's been in place since March,” said analysts at Secure Digital Markets. “A successful breakout could attract momentum traders and potentially drive the price to new all-time highs. However, a pullback towards the $64,000 mark seems more probable in the short term.”
The analysts’ call for a lower BTC price proved prescient as bears took over the price action at $70,000 and smashed the top crypto back below support at $67,000, dropping Bitcoin to a low of $66,393 in the afternoon.
BTC/USD Chart by TradingView
The U.S. government is being cited as the cause for the sudden drop after the Department of Justice moved just over $2 billion worth of seized Bitcoin connected to the Silk Road dark web marketplace to a new, as yet unidentified wallet, according to on-chain data shared by Arkham Intelligence.
Stocks also saw a volatile day of trading ahead of a big week filled with a Federal Reserve rate decision, the jobs report, and Big Tech earnings.
“This week’s reports will be crucial in determining if tech stocks, and by extension, crypto assets, can rebound,” said analysts at Secure Digital Markets. “Notable earnings releases include PayPal, AMD, and Microsoft on Tuesday; Meta on Wednesday; and Amazon, Apple, and Coinbase on Thursday.”
While the Fed is expected to hold interest rates steady on Wednesday, many market watchers think Fed Chair Powell will use his follow-up speech to set the stage for an interest rate cut in September. Wall Street currently puts the odds of a September cut at 100%.
At the closing bell, the S&P and Nasdaq finished in the green, up 0.08% and 0.07%, respectively, while the Dow lost 0.12%.
At the time of writing, Bitcoin trades at $67,358, a decrease of 1.02% on the 24-hour chart. Gold is down 0.05% and trades at $2,379.90.
Sideways trading at a key resistance level
“BTC had experienced strong upper resistance at the $68-69,000 region and also weathered a 7.24 percent intra-week pullback, as an accumulation trend in the spot markets continued in anticipation of former President Donald Trump and presidential candidate Robert F. Kennedy’s speeches at Bitcoin 2024 Nashville,” said analysts at Bitfinex. “Its final break through $69,000 was the first time it had reached this level since June 12th. We expect that the $68-69,000 level to continue to act as resistance however and we expect to chop in a range or decline slightly around these levels.”
“Following the decision by U.S. President Biden to step out of the race for this year’s election, volatility returned to the market,” they added. “Implied volatility in BTC options initially spiked to a 4-month high of 68.6 percent last week, before declining due to a majority of swing/positional traders de-risking ahead of the Nashville conference.”
“Over the weekend and during the conference, we saw a short spike in realized volatility but implied volatility continued to decline significantly, which is consistent with typical behavior before an options expiry, particularly if there are no significant impending events or catalysts,” they said.
“We believe this activity in the options market is driven by some de-risking of both short-dated calls and puts as short-term price catalysts like the Ethereum ETF launch and the Nashville conference passed,” Bitfinex said. “Another critical influence is the monthly expiry on August 2nd which, although it has contracts with net open interest of around $2.2 billion notional value, is seen as having less time value as the expiry approaches and so often results in a decline in implied volatility.”
“Looking ahead, the market will continue to digest news from Nashville, and adjust as the monthly expiry takes place at the end of the week,” the analysts predicted. “We expect potential further downward pressure on implied volatility. The decline in implied volatility will likely see BTC stalling, if not pulling back a little from the $68,000-69,000 resistance zone.”
TradingView analyst TradingShot noted that the resistance zone highlighted by Bitfinex aligns with Bitcoin’s “parabolic growth channel,” suggesting that once this resistance zone is overcome, Bitcoin will undergo a significant move higher.
“Bitcoin is about to close the month of July with a strong test-and-hold on its historic Parabolic Growth Channel, which is the zone that has signified its cyclical bottom and the recommended region to buy after a Bear Cycle,” he said. “This marks the 5th straight month of sideways trading and as this 1M chart shows, this is a behavioral pattern that normally takes place before BTC starts its most aggressive part of the Bull Cycle, the 'Parabolic Rally.’”
“What precedes this is of course the Accumulation Phase within the Parabolic Growth Channel,” TradingShot concluded. “We are some months past this stage and based on the Time Cycles, the market has just entered the (green) region where the Parabolic Rally can start anytime.”
Mixed start to the week for altcoins
Altcoins traded mixed on Monday with the top 200 tokens evenly distributed between winners and losers.
Daily cryptocurrency market performance. Source: Coin360
Book of Meme (BOME) led the gainers with an increase of 13.4%, followed by an 11.9% rally for Bitcoin SV (BSV) and an 11.6% climb for Convex Finance (CVX). Wormhole led the losers with a decline of 6.3%, while SATS (1000SATS) lost 5.1%, and Safe (SAFE) fell 4.9%.
The overall cryptocurrency market cap now stands at $2.41 trillion, and Bitcoin’s dominance rate is 55.1%.
