Notes 6/28: Bitcoin Price July Rally, TUSD Depegs

Bitcoin price continues to linger in the $30,000 range, awaiting its next catalyst in the form of an options expiry this Friday. Based on historical performance, investors are bracing themselves for a price rally in July. As of this writing, it is changing hands for $30,205.28, down by 2% in one day. Its price remains relatively unchanged from last week.

Crafting A Narrative

It will be difficult to craft a narrative for the anticipated price move, if it does occur. Regulators are yet to signal a hard pause in their crackdown on the ecosystem while the chances that lawmakers will pass a planned stablecoin bill anytime soon are remote.

Liquidity, one of the most important determinants for price, continues to shrink; investors are either selling off their cryptocurrency holdings or hoarding it for a bigger rally. MicroStrategy Inc. is reported to have purchased 12,333 bitcoin for $347 million between April 29 and June 27 (yesterday). That’s more bitcoin off the markets because the firm is a known to be bullish on the cryptocurrency on a long term basis. Since initiating a position in bitcoin in December 2020, it has dipped into its substantial holdings for a sale only once.

Whales or entities with substantial holdings of bitcoin are also out of action. The number of whales in bitcoin’s ecosystem has shrunk and the rise in those who hold more bitcoin is not enough to make up for the shortfall. Instead, opportunistic traders are moving in for the kill. Even increased inflows into digital asset funds cannot help boost liquidity because it is a circuitous route to gain exposure to bitcoin.

TUSD Enters The Binance.US Chat

Bitcoin, Tether, and other major coins continue to off their rockers at Binance.US.

TrueUSD (TUSD), another dubious token from the crypto stable, is the latest coin to lose its peg in the mayhem that is Binance.US. It was changing hands at 89 cents last night at the exchange and is changing hands for $0.98, as of this writing. Binance.US’s illiquid conditions are reflected in the stablecoin’s trading volumes. At one of point, it had a trading volume of $700. It is $2,100 right now.

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