Bitcoin (BTC)
Bitcoin started the week with significant declines, failing to reclaim the critical $86,000 level. We are entering a pivotal week that includes the Federal Reserve meeting and a crucial period for impending trade agreements with the U.S. The volatility in the market is expected to increase.
The Disruptive Phase in Cryptocurrencies
Bitcoin’s ongoing weakness is strengthening the possibility of a new wave of declines in altcoins. Today, a mysterious whale opened high-leverage short positions on BTC and ETH again. With the liquidation price for BTC around $86,000, investors are concerned due to the whale’s confidence. There are even claims that an insider, possibly even Trump’s son, is involved.
Daan Crypto Trades shared a graph of the total market cap of cryptocurrencies, emphasizing the necessary protective threshold to avoid a disruptive phase.
“The green zone is the mandatory threshold for the TOTAL CryptoMarket Value. Anything lower would directly send it back to the range of 2024, which would not be good. Price movements were heavily correlated with stocks, so keep an eye on the FOMC events happening next week.”
Prospects for Cryptocurrencies
Poppe is someone who tries to view cryptocurrencies from an optimistic perspective. Even as high-leverage short positions are opened going into Fed week, he remains hopeful about the future.
“Surprisingly, there wasn’t a significant drop on Sunday. A major macroeconomic week is approaching for the markets. If there are no further declines for altcoins on Monday, I assume the upcoming week will be strong and green.” – Michael Poppe
Moreover, Michael Saylor is preparing to purchase 250,000 BTC. Strategy, co-founded by Michael Saylor, plans to issue preferred stock up to $21 billion to continue its Bitcoin acquisitions. These will offer an 8% yield and can be converted into Class A common stock.
As Strategy grows, increased interest will create more cash opportunities. Considering that approximately 450 Bitcoin are produced daily, a purchase of 250,000 Bitcoin would cover around 555 days of new supply. Given the maximum supply of 21 million and the massive idle BTCs, it is not an exaggeration to say we are moving towards supply scarcity.
The issuance schedule for the $21 billion BTC purchase is not yet clear. Depending on market interest, this could continue for an extended period.
