It is not uncommon to see the bitcoin-dollar pair affixed to a tight sideways trading channel following bursts of bullish or bearish price action.
This behaviour is playing out right now, following the impressive mid-June bull run that saw BTC/USDT surge from a US$24,800 floor to highs above US$31,400 by the 23rd of last month.
Since then, the pair has closed between US$30,000 and US$30,7000 in all but one instance (that being this Monday’s close of US$31,150).
During a sideways trade, traders typically wait it out for the next major catalysing event to either rush for the exits or to buy in.
There is undoubtedly one catalysing event that traders are waiting with bated breath for right now: approval of BlackRock Inc (NYSE:BLK)’s bitcoin spot exchange-traded fund.
Though the US regulators knocked back the world’s largest asset manager’s application last Friday, BlackRock has refiled with the Securities and Exchange Commission (SEC) and is now waiting for feedback.
The SEC wants stricter surveillance measures put in place to combat fraud and market manipulation; whether BlackRock’s partnership with Nasdaq-listed cryptocurrency exchange Coinbase (NASDAQ:COIN) will cut the mustard is unclear- the SEC and Coinbase are not exactly friends.
Let’s say there’s a 50-50 chance of BlackRock’s ETF getting the go-ahead. This would open the doors to Fidelity, Cathy Wood’s ARK fund, WisdomTree, Grayscale and other major players getting in on the action.
That could be bullish, but until then, we could see bitcoin rangebound against the dollar.
At the time of writing, the BTC/USDT pair was changing hands at US$30,808, having closed 1.25% lower yesterday and stayed largely flat in this morning’s Asia trading window.
Buy-side orders on the Binance order book are in greater demand than sell-side orders, with the support line firmly planted at US$30,500.
Home on the rangebound – Source: currency.com
One metric of note is the bitcoin exchange reserve, i.e. the amount of bitcoin out of holders’ wallets and ready to trade on Binance, Coinbase, Kraken etc.
A high volume of on-exchange bitcoins typically indicates poor sentiment in the community (elsewise, they’d be safely locked away in cold storage).
The bitcoin exchange reserve has steadily decreased from 2.24mln BTC on 1 May to 2.09mln BTC today, per CryptoQuant data.
This adds to the ‘wait and see’ narrative among bitcoin holders at the moment. A bullish or bearish breakout is contingent on what happens with BlackRock and the SEC.
As for Ethereum (ETH), the world’s second-largest cryptocurrency closed one percentage point lower at US$1,936 yesterday and has stayed there since.
The global cryptocurrency market capitalisation currently stands at US£1.21tn, 51.25% of which comprises bitcoin’s market cap.
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