Bitvavo Market News - Bitcoin price is waiting for a breakout

BitvavoJun 4, 2024

It was a pretty calm week on the crypto market, maybe even boring. All signs indicate that investors are waiting for a breakthrough. There are some analysts, however, that think that Solana may have already had one. What do they mean by that? You can read about that, and more, in this Bitvavo Market News.

Market update

In the final ten days of May, bitcoin's price hovered around $69,000, the highest point of the 2021 bull market. You could almost think that this is an important price for the month's close. Yet there's a different price playing an even greater role.

Let's look at the monthly chart in US dollars. We have drawn a red line at $61,300, which was the highest monthly close of the previous bull market, in October 2021. In recent months, that price level has played an important role on the monthly chart:

In February we reached this line.
In March we broke ground above it.
In April we returned for a test of this line.
In May we bounced back.

On a monthly level, the upward trend of this bull market is in excellent health. The distance to the 10-month average has decreased somewhat and momentum indicators dropped to neutral values. For now, this is a normal lull, during which the market prepares for a continuation of the bull market.

At a price of €63,700, bitcoin is only 6% below March 14's peak. Ether does even slightly better. After the jump that followed ETF approval, number two is now at €3,550. That is only 5% below the local top.

However, it does not mean that a breakout to new records will inevitably follow in the short term. The price of most crypto has been going more or less sideways for two weeks. We are waiting for an event that will give the market direction. Does it come from American politics? Or perhaps from a macroeconomic angle? Then we might have to wait until Wednesday, June 12, when we see American inflation figures and a decision on the interest rate in the US.

Featured

Will TradFi opt for Solana?

A lot of attention has been paid to Ethereum in recent weeks. This seems logical as there were important decision moments on the agenda. But the regulator giving the green light to spot ether ETFs? Most people hadn’t taken that as a given.

In any case, competitor Solana disappeared into the background for a while as a result, but that all changed this week with PayPal's announcement of the launch of its stablecoin PYUSD. Why did PayPal opt for Solana? You can read more in this post on X but the gist is it's cheap, fast, and offers convenient functionality. In its own press release, PayPal touches upon the battle between Ethereum and Solana.

PayPal isn't the only one picking Solana recently.

Stripe last month launched a new payment option allowing users to pay with stablecoins (including $USDC) via Solana. This move allows users of more than 1.3 million websites worldwide to easily pay with stablecoins.

Visa last year also expanded its payment processing activities to include Solana. Why? “With a capacity of more than 5,000 transactions per second, Solana is the perfect partner for Visa,” the company wrote in an explanation of their decision.

Shopify also previously decided to integrate with Solana Pay. Customers of the e-commerce software can now easily activate web3 payments, as well as use loyalty programs involving NFTs.

It appears that the Solana ecosystem has entered an upward flow, with an increase in activity bringing new users. This week it was announced that GMX is preparing for launch on Solana. GMX is a decentralized trading platform that brings billions in trading volume to the network. LayerZero, a protocol that connects different blockchain networks, also started this week with support from Solana.

It probably won't stop there. Rumor has it that big names from the Ethereum world also want to connect with Solana, including Ethana, Aave, and Pendle.

Could this be the decisive period when Solana finally leaves the competition behind? Not so, say Solana insiders. “I think that moment will only come when there is an application that completely drowns out the activity on other networks,” says Miko Matsumura, partner at Cryptos Capital. “Every network is one killer app away from success.”

In other news

ESMA is considering allowing bitcoin into the UCITS investment fund market. That would mean that fund managers would make a small portion of their investments in bitcoin. The European regulator is asking for public feedback until August 7 before making a final decision. It still sees challenges on a legal level, including the question of how bitcoin should be stored under current EU rules. The total value of the UCITS market is 12 trillion euros.
Biden has finally put an end to the bill that the SEC had rejected. The president used his veto power to kill the bill to overturn SAB 121. Biden states that he made this far-reaching decision “in the interests of consumers and investors”. He goes against the wishes of several politicians, major crypto companies, and the American Bankers Association. It is possible to override the veto with a two-thirds majority in both political houses. The chance of that is small.
BlackRock passes Grayscale as manager of the largest bitcoin fund. US bitcoin funds could count on net inflows for the third week in a row. In total, assets under management grew by more than $1 billion. A whopping $719 million of that went to IBIT, BlackRock's fund. This allowed it to crown itself as king in the realm of bitcoin funds. “It will probably remain that way in the coming decades,” says ETF watcher Eric Balchunas on X.