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Bitcoin and the broader crypto market regained momentum this week as regulatory progress and renewed institutional demand improved sentiment - what’s next?
Bitcoin Key Points
- Bitcoin and the broader crypto market regained momentum this week as regulatory progress and renewed institutional demand improved sentiment.
- The biggest catalyst for this week’s bullish price action has been movement on the CLARITY Act in the USA; Six straight days of ETF inflows has helped as well.
- Bulls will want to see a break above $67K to strengthen the case for a rally toward $70K next.
Bitcoin and the broader crypto market regained momentum this week as regulatory progress and renewed institutional demand improved sentiment.
The biggest catalyst for this week’s bullish price action has been movement on the CLARITY Act in the USA, which would establish a federal market structure for digital assets and divide oversight between the SEC and CFTC. The White House reportedly agreed to an ethics package negotiated with Republican senators, removing a major obstacle that had stalled the bill. Despite the positive momentum, passage is not yet assured. Senate leaders still need enough Democratic support to reach the 60-vote threshold, while disputes remain over enforcement of restrictions on elected officials’ crypto activities.
Separately, US spot Bitcoin ETFs recorded a sixth consecutive day of inflows yesterday, including $203 million for the session and more than $600 million over the preceding five days. That has reinforced signs that institutional demand is recovering after heavy outflows in May and June.
The rally has spread beyond just cryptoassets themselves. Coinbase (NASDAQ:COIN) gained nearly 10% yesterday, Circle (NYSE:CRCL) rose almost 9%, and the crypto market as a whole added roughly $63 billion in market cap in a day. Looking forward, continued momentum on the CLARITY Act and additional inflows would be bullish signs that the rally is more than a classic “dead cat bounce.”
Bitcoin Technical Analysis: Bitcoin Daily Chart
From a technical perspective, there are several signs that Bitcoin may have put in a durable bottom. The king of cryptoassets carved out a bullish divergence with its 14-day RSI despite setting a marginal new low at the start of the month, signalling waning selling pressure despite the lower low in price. Since then, Bitcoin has rallied back to test its highest level in seven weeks above $66K.
As we head into the latter half of the week, bulls will want to see a break above the mid-June high near $67K to strengthen their case for a rally toward the 50% Fibonacci retracement of the Q2 drop near $70K next. On the other hand, a reversal back below last week’s high in the $65K zone would raise the odds that Bitcoin is entering more of a sideways range in the lower-$60Ks rather than an outright bullish reversal.
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