Bitcoin resilient despite Solana and Nomad hacks
Bitcoin is trading around $23,000 and is once again attracting “smart money,” as analysts say.
Bitcoin and Ethereum continue to be sideways, with the global cryptocurrency market capitalization at $1.07 trillion.
U.S. stock markets rose on Wednesday, with the S&P 500 and Nasdaq adding 1.6% and 2.6%, respectively, by the end of the day.
Cryptocurrency hacks dominated this week. On Wednesday, the network associated with the 9th largest cryptocurrency, Solana (SOL), was hacked. The day before, $190 million was reported stolen from the Coinbase-backed cryptocurrency bridge Nomad.
Analysts say Bitcoin has shown resilience despite these hacks.
According to CoinShares, Bitcoin-focused funds saw inflows of $85 million last week, while funds focused on short positions in Bitcoin faced outflows of $2.6 million. It was the first week of outflows for the Short-Bitcoin product after a 5-week inflow.
“Because these funds are typically bought by institutions and wealthy individuals, it’s a signal that smart money is very interested in buying cryptocurrency at these prices,” said analyst Marcus Satirio.
“However, for the first cryptocurrency to move higher, it needs a cryptocurrency-specific factor, and the news cycle has not been positive for Bitcoins,” said Edward Moya, senior market analyst at OANDA.
Cryptocurrency trader Justin Bennett tweeted that Bitcoin needs to recover from the $23,450 mark to open higher prices.
“So far, $ BTC is holding support above $23,000. But $23,450 needs to be overcome to go higher,” he wrote on his Twitter account on the evening of August 03, 2022.
Bitcoin: Observations
Glassnode’s weekly review of cryptocurrency markets states that stock markets reacted bullishly to the last Fed meeting, giving hope to bulls in cryptocurrencies as well. But despite the current rebound, onchain activity in BTC and ETH remains sluggish, which is basically confirmed by not full block occupancy in BTC and a very low gas price in ETH. There is also no active demand in the networks yet. Of course, onchain activity is only part of the story, but nevertheless – so far it is hard to say that the current rebound is something serious in terms of starting a real move up.
Bitcoin miners’ revenues in July 2022 were $555 million, and compared to June’s figure ($667 million), revenues fell 16.7%, according to analyst platform TheBlock.
Bitcoin’s hash rate has also fallen below 190 terraches. The drop is due to the unprofitability of mining on older ASICs and the abnormal heat wave in America.
Ethereum miners were slightly more productive, earning $549 million in June and rising to $596 million in July.
The decline in miners’ earnings could lead to their “capitulation” – the active sale of mined bitcoins to cover the current operating costs of maintaining their farms.
Analysts and traders continue to draw parallels with past cycles and point to a fractal with the possibility of a 300% rise in the price of Bitcoin.
The CEO of Morgan Creek predicts the beginning of the next bull market in BTC in 2024. The catalyst for this, in his opinion, will be another halving.
The CEO of cryptocurrency exchange Bitkub agrees with him on these expectations.
Bitcoin continues to move in line with stock indices.
Technically, Bitcoin has pulled back to the 200-week moving average. And on the monthly chart, the 50-month moving average is currently at $21960, so technically Bitcoin could go even lower to test it.
