Early signs of a market bottom
The crypto market appears to be cautiously looking for a floor. Prices remain weak, but several indicators suggest that the sell-off is losing momentum. This is not yet proof that the bottom has been reached, but it is an early indication that the market may be starting to shift. Meanwhile, governments, banks, and large investors are increasingly moving into the crypto space. More on this in this edition of Bitvavo Market News.
Market update
Bitcoin often shows clear divergences during the final stages of both bull and bear markets. In a bull market, prices continue to push higher highs even as indicators such as momentum, trading volume, on-chain metrics, and market sentiment begin to weaken. In a bear market, the reverse happens: prices drop to new lows, but the pace and intensity of the decline start to fade.
A good example is the Relative Strength Index, or RSI, on the weekly chart. During the middle phase of a bull market, price and RSI rise together. Prices make higher highs, and the RSI follows. Only in the final phase does divergence often occur: prices continue to rise while the RSI starts to lag behind.
We may now be seeing the bear market version of this pattern emerge. Last week's close was slightly below the lowest weekly close recorded in February, while the RSI finished notably higher. For now, this can only be considered a potential bullish divergence because a further decline in both price and RSI could erase this signal. Only when both price and indicator have clearly established a bottom is the divergence confirmed.
These are early signals that a market bottom may be forming within the current price range. However, we will only gain more certainty about a new upward trend with a weekly close above the 50-week moving average, which is currently around ā¬78,000. For now, that is still some way off.
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Bitcoin bigger than Strategy?
Following Bitcoin's recent price decline, the market was quick to point the finger at Michael Saylor. Much of theĀ mainstream media framed the story along the following lines: 'Bitcoin price fell after the American entrepreneur, billionaire, and Bitcoin advocate sold Bitcoin to meet obligations to investors.'
For years, Saylor accumulated Bitcoin, raised capital, took on debt, and used those funds to buy even more Bitcoin. As a result, Strategy became a publicly traded leveraged bet on Bitcoin. As soon as a player like that starts selling, even if it is only 32 BTC, the market begins to wonder. What if the largest corporate buyer of Bitcoin in history is forced to hit the brakes?
In the 1970s, the silver market was watching two brothers from Texas in much the same way. Nelson and William Hunt came from a family that had built its fortune in oil. The brothers grew up in a world of wealth, strong convictions, and distrust of paper money. After President Nixon ended the dollar's link to gold, they saw a monetary system that had lost its anchor.
Their solution was silver. It was freely tradable, cheaper than gold, and according to the Hunts, heavily undervalued. They began buying locally, then globally, and eventually with borrowed money. Through futures contracts, they also took physical delivery of the silver. The metal disappeared from the market and ended up in vaults in Switzerland, London, and the US.
By the end of 1979, the brothers had direct or indirect control over a huge portion of the freely tradable silver supply. The price rose from $6 to $50 per ounce in the space of one year. Jewelers and manufacturers saw their raw material become almost unaffordable. Tiffany & Co. even publicly attacked the brothersĀ in an advertisement in the New York Times.
Then the tide turned. Exchanges and regulators grew nervous and made it harder to hold large silver positions with borrowed money. When the silver price began to fall, banks and brokers demanded additional collateral from the brothers. This worked for a while, until March 27, 1980, when the Hunts were unable to pay a bill of roughly $100 million. The day became known asĀ Silver Thursday and marked the start of a brief period of panic in the commodities market.
Michael Saylor could have been one of the Hunt brothers. The similarity lies particularly in the way the market views them. A scarce asset can become so strongly associated with one buyer that all eyes end up on that person. In silver, it was the Hunts, and in Bitcoin, it is Saylor. That is why the sale of 32 BTC felt like such a significant event, and why a company's balance sheet can suddenly seem more important than the monetary system surrounding it.
Perhaps the uncertainty will blow over. Or perhaps Strategy will prove more vulnerable than many Bitcoiners would like to admit. For Bitcoin, that is the key question this week. Has digital gold become a Saylor story, or is Bitcoin bigger than Saylor?
To answer that question, we can return to the Hunts. There was a moment when investors wondered whether the silver price could still be viewed separately from two brothers from Texas. Ultimately, that question proved to be more important than the answer itself. Because when the brothers disappeared from the spotlight, silver remained.
In other news
CME Group has introduced 24-hour trading for crypto futures and options. The expansion gives investors access to regulated derivatives on digital assets for the first time,Ā even on weekends. During the first weekend of trading, more than 7,200 contracts changed hands, representing about $50 million in notional value. For years, traders watched the notorious 'weekend gap' between CME's Friday close and the Bitcoin price on Sunday evening. That era is now coming to an end.
Charles Schwab expanding its crypto services for asset managers. Financial advisors will be able to buy, trade, custody, and transfer crypto through the brokerage platform starting in 2027. This will give asset managersĀ access to the same infrastructure for Bitcoin and Ether as retail customers. The move is part of a broader trend in which established financial institutions are bringing more elements of the crypto value chain in-house.
Even Charles Hoskinson is concerned about Cardano. The founderĀ has warned of a new wave of project failures and departures after the analysis platform TapToolsā closure. According to Hoskinson, the ecosystem lacks funding, execution, and effective governance. The community even recently voted against funding the annual Cardano Summit. The price of ADA dropped below 20 cents, its lowest level in more than five years. Hoskinson announced on Thursday that he was taking a 'break'. How long he will be away remains unknown.
Japan increasingly sees stablecoins as a geopolitical instrument. The ruling party wants to use yen stablecoins for cross-border payments in Asia and is also advocating for a legal framework for crypto ETFs. Both proposals are driven by the same concern: the growing dominance of dollar-backed stablecoins. Around the world, governments are increasingly treating stablecoins as part of the infrastructure for international payments. As a result, a broader contest is emerging beneath the surface of the digital economy: which currencies will play the leading role in it.
Satoshi Radio: InĀ the latest episode of Satoshi Radio, the gloomy sentiment in the crypto market takes center stage. The hosts discuss everything from comparisons between Strategy and Terra Luna to investors stepping back from bitcoin. They also cover Mastercard's stablecoin plans, the first regulated perpetuals product in the US, and growing attention to quantum risks. As always, the episode closes with a market update.
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.