Nashville Conference Drives BTC to $70,000, What's Next for the Market? | TrendX Research Institute

Bitcoin Breaks $70,000 Again: Brief Peak and Market Retracement

On July 30, 2024, after a month-long slump, Bitcoin (BTC) briefly broke through the $70,000 mark, reaching a high of $70,050. This price peak has attracted widespread attention and discussion in the market, with many investors and analysts speculating whether Bitcoin will once again reach a new all-time high. However, the high volatility and unpredictability of the market meant that this peak did not last, and the price of Bitcoin quickly retraced. This situation once again reminds investors that the cryptocurrency market is full of risks and uncertainties.

Nashville Bitcoin Conference: Key Event Driving Market Sentiment

The short-term surge in Bitcoin prices is partly attributed to the Bitcoin Conference held in Nashville, Tennessee from July 25 to 27, 2024. This conference, due to its scale and influence, as well as the attendance and speech of former U.S. President Trump, attracted global attention. Trump's remarks and proposals at the conference sparked widespread discussion and market reactions.

Trump's Remarks and Proposals

At the conference, Trump put forward a series of bold suggestions regarding Bitcoin, including establishing a strategic reserve of Bitcoin for the United States and dismissing the current chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler. He believed that these measures would help the United States take a leading position in the global cryptocurrency field. In addition, Trump also claimed that the United States would become the global center for cryptocurrencies and even a "Bitcoin superpower." These remarks not only sparked heated discussions at the conference but also directly impacted the Bitcoin market, driving a brief price increase.

Other Important Speeches: Further Driving Market Expectations

In addition to Trump, speeches by other important figures at the conference also attracted widespread attention. For example, U.S. presidential candidate Robert F. Kennedy Jr. stated at the conference that if elected president, he would sign an executive order instructing the U.S. Department of the Treasury to purchase 550 Bitcoins daily until the reserve reaches 4 million BTC. He believed that this measure would greatly increase the valuation of Bitcoin, possibly pushing its market value to trillions of dollars. In addition, he also proposed changing the policy of the U.S. Internal Revenue Service so that transactions between Bitcoin and the U.S. dollar would not require reporting or taxation. If implemented, this proposal would have a profound impact on the trading volume and market participation in Bitcoin.

U.S. Senator Cynthia Lummis also expressed strong support for Bitcoin at the conference. She suggested that the U.S. government should purchase 5% of the total Bitcoin supply and hold it for at least 20 years. This proposal received support from Michael Saylor, the founder of MicroStrategy, who predicted that the price of Bitcoin could reach $49 million by 2045. Robbie Mitchnick, the head of digital assets at BlackRock, called on investors to actively purchase Bitcoin ETFs (exchange-traded funds). He pointed out that the buyers of the ETF (IBIT) are almost all long-term holders, as evidenced by the fact that IBIT had only one day of net outflows in the past six months. These speeches show that some institutions and individuals hold an optimistic outlook on the long-term prospects of Bitcoin.

Market Retracement: Risks and Uncertainties

Despite a series of positive speeches and market activities, Bitcoin quickly retraced after breaking through $70,000 in the short term, which may be related to the market's expectation of a potential retracement after the conference. A report released by Bitfinex Alpha during the conference pointed out that the implied volatility of the Bitcoin options market had soared at one point but has since declined. This change may indicate that Bitcoin prices will experience a slight consolidation in the short term.

In addition, on the morning of July 30, there was another small test transfer (0.02 BTC) from the Mt.Gox address. Considering that Mt.Gox has historically made substantial large transfers after such operations, this has also heightened market panic and further amplified the retracement. It is reported that the low point of the retracement occurred around 8:15, shortly after this news was released. This event once again reminds investors that the volatility and uncertainty of the Bitcoin market remain high.

Performance of the ETF Market: Optimistic Sentiment of Institutional Investors

Despite the volatility in the Bitcoin market, the ETF market has remained strong. According to monitoring data from Trader T, on July 29, the net inflow of the U.S. Bitcoin spot ETF was $123.1 million. This means that in the past half month (calculated only on trading days), there was only one day of net outflows in the ETF market, with positive inflows on other trading days. This data indicates that institutional investors still hold an optimistic outlook on the long-term prospects of Bitcoin.

Attention to Bitcoin Ecological Projects

With the fluctuation of Bitcoin prices, some Bitcoin ecological projects have also attracted investors' attention. In particular, some projects closely related to Bitcoin, such as SATS and CKB, have received more attention.

SATS is a leading project in the BRC inscription of the Bitcoin ecosystem, with meme attributes. Recently, SATS has shown strong performance relative to ORDI, and the market expects related positive news to be released. CKB is a Bitcoin Layer 2 project based on the extended protocol RGB++, dedicated to addressing the shortcomings of the Bitcoin ecosystem. CKB continues to improve the technical level of the project in the competition of Layer 2 solutions, demonstrating strong technical potential.

Changes in the POW Sector: Performance of BCH, KAS, BSV

Coins in the POW (proof of work) sector such as BCH, KAS, and BSV have also performed well recently. Especially after Trump's attendance at the Bitcoin conference, the prices of these coins have significantly increased in the short term.

BCH, KAS, and BSV increased by 15%, 12%, and 18% respectively after Trump's attendance at the conference. The market believes that this is related to favorable policies for the mining industry announced by Trump at the conference. The popularity of POW coins has surged in a short period, with significant inflows of funds and traffic. Investors and analysts need to continue to pay attention to the attention these tokens receive from the mining community on social platforms such as YouTube and Telegram.

In addition, the increase or decrease in open interest is also an important market indicator. For example, the open interest of BCH has increased recently, indicating the inflow of hot money into the market. Through contract data, the main capital flow of the market can be observed, such as the increase in long positions and the amplification of trading volume, which are important references for judging market trends.

Conclusion

The rapid retracement of Bitcoin's price after breaking through $70,000 shows the high volatility and complexity of the market. Despite numerous positive news and policy support, the market performance of Bitcoin remains full of uncertainties. With more institutional investors participating in the Bitcoin market and changes in the global policy environment, the future of Bitcoin remains uncertain. For investors, it is crucial to remain cautious, keep an eye on market dynamics, and engage in appropriate risk management to cope with this highly volatile market.

Subsequent focus should be on Bitcoin ecological projects such as SATS and CKB, as well as coins in the POW sector like BCH, KAS, and BSV. The performance of these projects and sectors will be significantly influenced by policy changes and market sentiment, and investors need to closely monitor relevant developments to make wise investment decisions.

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