[Xangle Digest]

※ This article contains content originally published by a third party on June 21, 2023. Please refer to the bottom of the article for the copyright notice regarding this content. 

※ This is a summary of the weekly research published by Matrixport on June 21st.

Executive Summary

Making money in crypto requires a flexible trading strategy, especially in the absence of a larger bull market. In those periods between bull markets, tactical trading becomes overwhelmingly important considering the macro and liquidity environment. Occasionally, traders must step back from the market to see potential resistance and support levels and make sound trading decisions – even when the news flow contradicts those rational trading decisions.

Last week Bitcoin prices retraced back to $25,000 – a level we previously defined as the maximum acceptable support level for the bull market to reset itself. In our April 17 report, we suggested to take profits and a week later on April 24, we voiced suspicion that Binance could be hit by negative news soon as the funding rate of Binance’s BNB token traded deeply negative. The SEC-Binance lawsuit indeed caused prices to decline further into this $25,000-support zone. 

 We laid out two scenarios and suggested buying 50% at 27,500 and 50% at 25,000
Source: Matrixport Technologies

Our Greed & Fear Index briefly (intra-day) fell below the 10%ile level, often associated with attractive risk-reward buying opportunities, as we saw on March 10 2023. Ethereum has traded back to its 200-day support level, generally used to determine if an asset is in a bull (above) or bear market (below its 200-day support). Even though last year, the 200-day moving average signalled the end of bear market rallies for Ethereum, this year, this moving average signals the support during the bull market. Triggering those technical levels caused a huge rally as Wall Street Titans are entering the crypto product offering.

Ethereum’s trend has changed, from Bear Market Resistance to Bull Market Support
Source: Matrixport Technologies

During the last few days, we came across the following headlines:

• “$9.5 trillion asset manager Blackrock filed for a Bitcoin ETF”

• “Germany’s $1.4 trillion assets manager Deutsche Bank applies for regulatory license to operate crypto custody service”

• “Citadel, Fidelity and Charles Schwab launch new crypto exchange platform, EDX Markets”

• “$87bn asset manager WisdomTree files for spot Bitcoin ETF” 

• “$1.5 trillion asset manager Invesco reactivates spot Bitcoin ETF filing”

We can imagine that this Blackrock iShares “commodity” Bitcoin ETF will attract an allocation in the range of ~$20-50bn over time as ETFs that are focusing on Gold alone hold ~$100bn. This Blackrock announcement has a high probability of being approved by the SEC, and will drive continuous adoption from institutional investors for Bitcoin.

While crypto still needs more than favourable macroeconomic tailwinds and institutional inflows into Bitcoin, this is a welcoming development that reminds investors that crypto is here to stay. This $25,000 level should provide ample support going forward.

-> 'Click' here to read the full report.