Bitcoin has risen to just under $40,000 for the first time in six weeks with it currently trading at about $38,500 as it leads a crypto recovery with it unclear whether we’re seeing a cup and handle on 4h candles as pictured above.
A cup and handle is a very bullish formation that suggests bears have run out of ammo, with bulls charging. Bears then give it another try to form the handle, but upon being defeated by bulls, the asset takes off.
The above looks kind of like such formation, but of course it depends on price action whether it will fully play out.
That’s just one driver however. A bigger one may well be China where the party has made the stock price of even a food delivery app, Meituan, plunge 14% following yet some more regulations requiring respect for the rights of delivery staff.
The Hang Seng China Enterprises Index, which includes Hong Kong-listed mainland stocks, has entered a bear market after falling 24% from a February peak.
Some may still be holding however, but plenty will be looking for new assets with bitcoin an apt one due to it being outside of the banking system, so it can’t be seized or given a haircut if defaults lead to banking troubles.
The news that SpaceX bought bitcoin and that its CEO, Elon Musk, doesn’t ‘dump,’ may have also contributed towards changing sentiment.
That was followed by Amazon suggesting they’re looking to enter the crypto space, while eth is now just over a week away from upgrading to EIP1559 which will reduce its total supply.
Bitcoin has been leading however with eth’s ratio not quite keeping up as it charges towards that $40,000 line which it hasn’t comfortably overtaken since May.
There is also a bit of FUD, but a very mixed one with Bloomberg reporting DoJ is opening an investigation on Tether for ‘banking fraud.’
“Specifically, federal prosecutors are scrutinizing whether Tether concealed from banks that transactions were linked to crypto, said three people with direct knowledge of the matter who asked not to be named because the probe is confidential,” they say.
Crypto is not illegal, so it’s not clear why it is any of the bank’s business what the account is used for as long as its usage is legal, which it is because Coinbase does the same with USDc.
Therefore it’s not clear whether the investigation will go anywhere as proving fraud over legal activity would be a high barrier.
The good news is that DoJ investigating potential fraud suggests they’ve moved on from investigating whether Tether manipulated bitcoin’s price.
“Reserves exceed liabilities,” said Paolo Ardoino, Tether’s CTO, with Bitfinex and Tether now settling a claim by the New York Attorney General for $18.5 million regarding the matter.
All this so indicating Fed is probably looking for a way to have a say over tokenized dollars as they near $100 billion in market cap.
Something that may well increase the adoption of such tokens if they’re brought into the limelight, and thus may smooth the on and off ramps for cryptos in general.
Otherwise in the worst case scenario, everyone would be running from Tether to bitcoin which would probably send the crypto into a bull run as has been the case previously when USDt briefly went off peg.
All of it suggesting the FUD is kind of fading and weakening with another potential contributor to bitcoin’s rise being lockdowns especially in Australia.
It is winter there so nowadays that means locked in houses with corrupt bureaucrats making their way through the Greek alphabet while proposing boosters may be needed as big farma fattens its pockets.
That’s generally with printed money, and so some Australians may well be going bitcoin with a clash of sorts arising especially in Europe between the elected and the populace regarding never ending restrictions or govern me harder daddy and freedum.
Generally however the economy is opening up with the professional class moving on since May 2020, while in ‘normie’ town the BBC especially continues on and on, but the ‘normies’ also seem to be moving on now.
As is bitcoin, with the big theme coming up being potentially the ramifications of those lockdowns, especially in China where they may have overextended.