As the summer lull continues in the crypto market, a series of intriguing factors and metrics suggest a big change might be coming in September. With Bitcoin currently moving sideways, some analysts predict a strong upward move in the fourth quarter.
Meanwhile, whispers of China potentially unbanning crypto are adding to the anticipation, suggesting that the latter half of the year could bring major developments for the crypto space.
China’s Crypto Unban?
One of the most exciting news is the possibility that China may soon lift its ban on cryptocurrency trading. In a recent tweet post Justin Sun, founder of Tron, has hinted that China might allow its users to begin trading & mining in crypto.
Earlier this year, China allowed crypto-related activities in Hong Kong, including the launch of ETFs and retail trading. If China extends these permissions to the mainland, it could inject a significant amount of capital into the crypto market, further fueling the bullish outlook for the remainder of the year.
Bitcoin Stagnation: The Calm Before the Storm?
The crypto market might appear stagnant at the moment, with Bitcoin largely trading sideways. However, macro investor Raoul Pal describes this period as the “boring zone,” with nothing substantial happening in the immediate term. Despite this, there are several positive indicators worth noting.
The stock market, particularly the S&P 500, has experienced a V-shaped recovery on its daily chart, signaling potential strength ahead. The Relative Strength Index (RSI) for the S&P 500 isn’t even in the overbought zone yet, which is another encouraging sign.
A Bullish Sign for Bitcoin
The US Dollar Index (DXY) is showing signs of weakening, which traditionally benefits riskier assets like Bitcoin. An inverse correlation between Bitcoin and the DXY means that as the dollar loses strength, Bitcoin often gains momentum.
Institutional Interest on the Rise
Another critical factor is the increasing interest from traditional financial institutions in Bitcoin and other cryptocurrencies. Recent SEC filings reveal that Morgan Stanley and Goldman Sachs have significantly increased their holdings in Bitcoin-related funds, including the BlackRock Bitcoin ETF. This institutional interest underscores growing confidence in Bitcoin’s future.
Also Check Out: Crypto Regulations In China 2024
