Crypto attracts buyer interest, but reversal needs proof

Market picture

Crypto market capitalisation rose 1.4% over the last 24 hours to $1.138 trillion. After quiet trading on Monday, most gains came on Tuesday morning. The timing of the move is due to news on the US debt ceiling, where there is no deal yet, but Biden notes progress in negotiations. Ether is up 2.3% at $1856, with the top altcoins gaining between 0.3% (Solana) and 3% (Polygon).

Bitcoin is up 1.6% over the past day to $27.3K and earlier today climbed close to $27.5K, the upper end of the range since the 15th. Despite the positive momentum, the daily timeframes remain bearish, with Bitcoin trading below $27.5K.

According to CoinShares, investments in cryptocurrency funds fell for the fifth consecutive week to $32 million last week, with bitcoin investments down $33 million and Ethereum investments down $1 million. Investment in funds that allow shorts on Bitcoin fell by $1.3 million.

According to Santiment, the number of BTC and ETH on exchanges has fallen to its lowest level in several years, which is seen as a sign of an attitude towards long-term holding.

News background

Mott Capital Management founder Michael Kramer warned that Bitcoin could fall to $20K. According to him, BTC is a leading indicator for all risky assets, so its decline would be negative for the stock market.

Anthony Scaramucci, founder of hedge fund SkyBridge Capital, believes that the actual value of Bitcoin should now be $40K. According to him, we are now witnessing a global proliferation of BTCs, similar to what happened in the late 1990s with the rise of the internet.

Cryptocurrency platform Bakkt is considering expanding its business in Europe in light of the Crypto Asset Market Regulation Act (MiCA) passed in April. Bakkt currently only offers services in the US.

US lawmakers have drafted a bipartisan bill prohibiting the Fed from issuing the digital dollar (CBDC). Lawmakers cited Americans' right to financial privacy.