- Bitcoin remains below its all-time high reached four months ago.
- Significant upward movements are expected in the second half of the year.
Bitcoin’s Path to New Heights: Analyzing the Roadblocks and Catalysts
Bitcoin (BTC) has experienced a notable price increase over the past week but remains below the all-time high it reached four months ago. According to an analysis by Coinbase, several factors are influencing this stagnation, despite the potential for significant upward movements in the latter half of the year.
A key reason for Bitcoin’s current price level is the ongoing impact of the Mt. Gox bankruptcy repayments. Coinbase highlights that the insolvency refunds have continued to exert pressure on Bitcoin‘s price. On-chain data from Arkham Intelligence Explorer reveals that in July alone, 50,000 BTC were released to exchanges, with a remaining balance of 90,300 BTC still pending delivery.
Coinbase suggests that at the current levels, there may be profit-taking and increased willingness among market participants to sell due to price increases, which could limit further upward movement. However, there is no clear indication that these repayments will immediately flood the market. Coinbase believes that any sales related to the Mt. Gox refunds are likely to be gradual and orderly, thus not exerting severe downward pressure on Bitcoin‘s price.
The political landscape in the United States also plays a crucial role in the future trajectory of Bitcoin. The upcoming U.S. presidential elections in November are anticipated to be a significant driver for cryptocurrency markets. Market participants are optimistic about a potential victory for former President Donald Trump, who has historically supported the cryptocurrency sector. This potential shift in regulatory environment could favor Bitcoin and other digital assets.
Trump’s pro-crypto stance is further reinforced by his running mate, JD Vance, a known cryptocurrency advocate who holds between $100,000 and $250,000 in Bitcoin, according to his latest financial disclosure.
Coinbase analysts, alongside other experts, emphasize that a Republican administration could positively impact the market. Trump’s anticipated fiscal policies, including substantial tariffs and expansive fiscal measures, are expected to increase inflation, leading to a steeper yield curve for U.S. Treasuries. This, coupled with planned interest rate cuts, could result in a weaker dollar, benefitting Bitcoin by underscoring its ‘store of value’ narrative.
Furthermore, institutional interest in Bitcoin continues to grow. Positions in Bitcoin futures and capital inflows into Bitcoin ETFs are on the rise, with institutional investors engaging in basis trading in anticipation of the supply overhang subsiding.
Altcoin activity remains subdued during the typically quieter summer months in the Northern Hemisphere. However, the market eagerly awaits official news regarding the approval of a spot Ether (ETH) ETF in the United States, expected on July 23. This development could potentially draw new demand for crypto-assets, contributing to the overall market dynamics.