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Rising Tide in Crypto Market
Today, the crypto market is experiencing an uplift, with traders scrutinizing its oversold status and speculating on the possibility of the SEC approving the inaugural Bitcoin ETF.
Explaining Today's Positive Movement
The crypto market has built upon its gains from Friday, riding a wave of both technical and fundamental influences.
Rebound for Major Crypto Assets
On June 17, the total market capitalization of cryptocurrencies saw a boost of over 2%, landing at $1.05 trillion, which represents a significant climb of nearly 7.5% from the $975.25 billion trough just two days prior.
Bitcoin, which makes up close to half of the entire crypto market, experienced an 8.5% upswing from the June 15 lows of $24,750.
Ether, the second most significant cryptocurrency, has grown by over 9% in the last two days. Solana, Cardano, and Polygon, which suffered most heavily last week, have also seen rebounds between 8-15% during the same timeframe.
Fascinatingly, the market cap began its recovery a day after the relative strength index (RSI) of the market nearly touched 30, hinting at an "oversold" situation.
From a technical standpoint, an oversold RSI usually heralds a period of price stabilization or recovery, as illustrated below.
Potential Bitcoin ETF Approval Stimulates Market
The technical bounce was not the only factor at play. Rumblings of the first-ever Bitcoin ETF approval in the U.S. also played a part in the market's revitalization.
Significantly, BlackRock, an investment firm controlling $9.5 trillion in assets, submitted an application for a Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC) on July 16. Out of 576 ETFs applied for in its history, only one has been rejected.
Since the BlackRock application, the crypto market has risen by 4.5%, with market analyst Lark Davis speculating that SEC approval could see the investment giant purchasing all available Bitcoin across crypto exchanges.
Here's a snippet from Davis's commentary:
"Only around 10% of all Bitcoin [worth $50 billion] is available on exchanges. If BlackRock decides to allocate 0.5% of its money to BTC, it could absorb every single available coin."
However, it's worth noting that the SEC has historically rejected all Bitcoin ETF applications, from asset managers such as VanEck, Ark Invest, and Bitwise.
Crypto Market Forecast for H2 2023
Technically speaking, since April 2023, the crypto market has oscillated within a bull flag pattern, which hints at a potential continuation of its recovery trend towards $1.37 trillion into H2 2023 — a 35% rise from its current value.
In contrast, the bears will aim to drive the market cap beneath the lower trendline of the bull flag, threatening to quash the bullish outlook entirely.
Under this pessimistic scenario, the crypto market could tumble towards the next significant support at $875.50 billion, a crucial benchmark from the June-November 2022 and March 2023 periods.
