Opening bell │ #21 │ 15th July
Report highlights:
Bitcoin
Crypto markets turn greedy and bullish.
Blockchain transparency is a double-edged sword, and markets quickly learned the effectiveness of movement communications.
The German government, which began moving Bitcoin a week ago, sent markets tumbling by over 10%.
Over 40,000 seized Bitcoin rattled markets amid declining prices and soft ETF inflows since the start of June.
BTC/USD and 200-day moving average
However, crypto investors saw the dip not only as an opportunity but also as a chance to show the resilience of a community that genuinely believes in hard money.
Markets bought it all and even turned greedy before the end of the week last Friday, with ETF inflows breaking the billion mark.
Weekend events further uplifted markets after the failed assassination attempt on former President Donald Trump, with markets now predicting a sweeping win for the crypto-friendly Republican party.
Traders are now highlighting another bullish metric: Bitcoin is trading above its 200-Day Moving Average after teetering below it following news of the German sale. The last time Bitcoin recovered from this line was October 2023 which kicked off the bull-cycle.
Bitcoin fear and greed index at highest level since April bottom
Bitcoin?
Bitcoin risk signal hits high for the year hinting at potential bottom.
On-chain analytics firm Glassnode has extensive experience in tying data together to help investors find signal and direction. Their Bitcoin Risk Signal combines various on-chain and trading metrics. Although high numbers on this metric indicate high risk, it has historically proved to be a good indicator of market bottoms, suggesting great potential upside for those willing to enter the market during severe drawdowns. The metric signaled the market bottom in May this year and has just hit a new high in July. This suggests a “risk-on” scenario with the possibility of significant rewards.
Glassnode bitcoin risk signal
DeFi
Asset-backed currencies protocol reserve grows 10x.
The overwhelming majority of DeFi protocols have struggled to show growth in this year’s crypto bull market. Reserve Protocol isn’t one of them. The platform, which allows users to create asset-backed yield-bearing tokens aimed at maintaining price stability against the dollar, has seen its Total-Value-Locked (TVL) grow from $20 million a year ago to a massive $200 million. Since the start of this year, user numbers have also grown tenfold. There are now over 2,000 asset-backed tokens offering high-yield opportunities, bolstered by reward incentives for market liquidity.
Reserve protocol TVL? |? USD mn
Macro
Global liquidity index notches up its most seen this year since start of July.
Bitcoin ETF AUM & flows?
Bitcoin holdings, cumulative ETF inflows hit new record.
In our previous Opening Bell, we highlighted how inflows had begun to slowly recover and that the price of Bitcoin had been dislocated from the flow-to-price trend ever since ETFs began trading.
The recent price dip was triggered by news that the German government would sell over $2 billion worth of Bitcoin.
However, last week proved to be a genuine hallmark moment for the crypto industry as ETF investors, for the first time, bought the significant dip rather than turning markets into a sales frenzy.
Over $1 billion in inflows came from ETF investors, who increased total BTC holdings by 2.5% since the end of June when flows turned back to positive territory.
ETF flows remain the strongest narrative, but they can be difficult to gauge when looking at the large players alone.
For example, 80% of trading days have seen inflows for BlackRock’s IBIT, only to be surpassed by Fidelity, which has seen inflows 82% of the time (see chart).
ETF flows by issuer? |? % of days
Daily change in BTC holdings? |? %
Looking at other ETF players can help define sentiment a great deal more despite the significantly smaller figures.
The Invesco Galaxy Bitcoin ETF (BTCO) has only seen positive inflows on 37% of trading days.
The difference in market timing is striking.
For instance, at the start of May, BTCO increased their total BTC holdings by over 8% after selling at the top in March.
Last week, BTCO investors once again increased their Bitcoin holdings the most relative to their total Assets-under-Management outpacing all other ETFs.
Cumulative Bitcoin ETF flows? |? USD bn
Economic calendar
Key events this week : Europe CPI, interest rate decision. Fed Powell to speak.
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