July 17, 2024

A message from Agoric

Bitcoin traders are eyeing a short-term price target of $70,000 as BTC briefly climbed above $66,000 during the Asian day. Bitcoin subsequently retreated to $65,000 during the European morning, still 2.2% higher than 24 hours ago. “The rebound in Bitcoin price shows the market has a more optimistic outlook in the near-term macro environment,” shared Lucy Hu, senior analyst at Metalpha, in a message to CoinDesk. “The market was encouraged by Donald Trump’s vice president pick, which indicates a more crypto-friendly administration and policies.” Bitcoin may also be benefiting from more bullish sentiment as traders expect less selling pressure in the long term as Mt. Gox repayments to creditors have commenced.

Bitcoin ETFs extended their seven-day winning run on Tuesday, recording $422.5 million of inflows, the biggest single-day tally since June 5. The lion's share was enjoyed by BlackRock's IBIT, which amassed over $260 million. The ETFs have collectively drawn in over $1 billion in just the last three days, underscoring the upward swing in confidence in bitcoin's price prospects. The ETFs' seven-day inflow streak coincides with a surge of around 20% in BTC. Along with Donald Trump's improved presidential prospects, it's likely that the supply overhang from sales by German state Saxony is behind us and the crypto market is catching up with the sustained rally in technology stocks on Wall Street.

XRP has jumped over 12% in the last 24 hours, comfortably outperforming its fellow crypto majors. The broader crypto market, as measured by the CoinDesk 20 Index, has risen around 4.2%. XRP's seven-day gains have grown to about 40%, snapping a long run of performing worse than the rest of the digital asset market. "The reversal of sentiment in crypto has sparked a rise on steroids in the once-largest altcoin," Alex Kuptsikevich, FxPro senior market analyst, said. Gains in the token started last week as CME and CF Benchmarks announced the debut of indices and reference rates for XRP. The moves have formed a triangle pattern on long-term price charts, which some popular traders say could favor bullish action in the coming weeks.

Wall Street's pivot to shares in small-cap companies at the expense of mega caps could fuel gains in the crypto market, Marex Solutions told CoinDesk Wednesday.

Since July 8, Nasdaq, Wall Street's tech-heavy index of 100 shares, including the likes of Amazon, Apple, Microsoft and Nvidia, has traded little changed around 2,270 points. Meanwhile, the small-cap index, Russell 2000, has surged more than 12%, according to the charting platform TradingView.

It's a sign investors are pulling money out of the largest tech firms and dumping it into smaller companies which, until recently, lagged behind the broader market. The Wall Street Journal attributes the newfound love for small caps to cooling inflation and strengthening confidence that the Federal Reserve will reduce the benchmark borrowing cost this year.

The sector rotation could be the most important macroeconomic factor for cryptocurrencies, according to Ilan Solot, senior global strategist at Marex Solutions, a division of global financial platform Marex specializing in creating and distributing customized derivatives products.

"Small caps are the knee-jerk reaction, but I suspect crypto will benefit from this rotation," Solot said in an interview.

- Omkar Godbole