Bitcoin Breaks $70,000 Again: Brief Peak and Market Correction

On July 30, 2024, after a month-long slump, Bitcoin (BTC) briefly broke through the $70,000 mark, reaching a high of $70,050. This price peak has attracted widespread attention and discussion in the market, with many investors and analysts speculating whether Bitcoin will once again reach a new all-time high. However, the high volatility and unpredictability of the market led to the short-lived nature of this peak, and the price of Bitcoin quickly corrected. This situation serves as a reminder to investors that the cryptocurrency market is full of risks and uncertainties.

Nashville Bitcoin Conference: Key Event Driving Market Sentiment

The short-term surge in Bitcoin prices is partly attributed to the Bitcoin Conference held in Nashville, Tennessee from July 25 to 27, 2024. This conference, due to its scale and influence, as well as the attendance and speech by former U.S. President Trump, attracted global attention. Trump's remarks and proposals at the conference sparked widespread discussions and market reactions.

Trump's Remarks and Proposals

At the conference, Trump put forward a series of bold suggestions regarding Bitcoin, including establishing a strategic Bitcoin reserve for the United States and dismissing the current chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler. He believed that these measures would help the U.S. take a leading position in the global cryptocurrency field. Furthermore, Trump also claimed that the U.S. would become the global center for cryptocurrencies and even a "Bitcoin superpower." These remarks not only sparked heated discussions at the conference but also directly impacted the Bitcoin market, driving the short-term price increase.

Other Important Speeches: Further Shaping Market Expectations

In addition to Trump, speeches by other important figures at the conference also garnered widespread attention. For example, U.S. presidential candidate Robert F. Kennedy Jr. stated at the conference that if elected president, he would sign an executive order directing the U.S. Department of the Treasury to purchase 550 Bitcoins daily until the reserve reaches 4 million BTC. He believed that this measure would greatly increase the valuation of Bitcoin, potentially pushing its market value to trillions of dollars. Additionally, he proposed changing the policy of the U.S. Internal Revenue Service to allow tax-free transactions between Bitcoin and the U.S. dollar. If implemented, this proposal would have a profound impact on Bitcoin's trading volume and market participation.

U.S. Senator Cynthia Lummis also expressed strong support for Bitcoin at the conference. She suggested that the U.S. government should purchase 5% of the total Bitcoin supply and hold it for at least 20 years. This proposal received support from Michael Saylor, the founder of MicroStrategy, who predicted that by 2045, the price of Bitcoin could reach $49 million. Robbie Mitchnick, the digital asset manager at BlackRock, called on investors to actively purchase Bitcoin ETFs (Exchange-Traded Funds). He pointed out that the buyers of the ETF (IBIT) are almost all long-term holders, as evidenced by the fact that IBIT had only one day of net outflows in the past six months. These speeches demonstrate that some institutions and individuals hold an optimistic outlook on the long-term prospects of Bitcoin.

Market Correction: Risks and Uncertainties

Despite a series of positive remarks and market activities, Bitcoin quickly corrected after breaking $70,000, possibly due to market expectations of a potential post-conference Bitcoin correction. A report released by Bitfinex Alpha during the conference pointed out that the implied volatility of the Bitcoin options market had surged but had since declined. This change may indicate a minor consolidation in Bitcoin prices in the short term.

Additionally, in the early morning of July 30, a small test transfer of 0.02 BTC appeared again from the Mt. Gox address. Considering that Mt. Gox has historically followed such operations with substantial large transfers, this further heightened market panic and amplified the extent of the correction. It is reported that the low point of the correction occurred around 8:15, shortly after this news broke. This event once again reminds investors that the volatility and uncertainty in the Bitcoin market remain high.

Performance of ETF Market: Optimistic Sentiment of Institutional Investors

Despite the volatility in the Bitcoin market, the performance of the ETF market remains strong. According to monitoring data from Trader T, on July 29, the net inflow of the U.S. Bitcoin spot ETF was $123.1 million. This means that in the past half month (counting only trading days), there was only one day of net outflow in the ETF market, with positive inflows on other trading days. This data indicates that institutional investors still hold an optimistic outlook on the long-term prospects of Bitcoin.

Attention to Bitcoin Ecological Projects

With the fluctuation in Bitcoin prices, some Bitcoin ecological projects have also attracted investors' attention. In particular, projects closely related to Bitcoin, such as SATS and CKB, have gained more attention.

SATS is a leading project in the Bitcoin ecosystem with meme attributes. Recently, SATS has shown strong performance relative to ORDI, and the market expects related positive news to emerge. CKB, on the other hand, is a Bitcoin Layer 2 project based on the extended protocol RGB++, dedicated to addressing the shortcomings of the Bitcoin ecosystem. CKB continues to enhance the technical capabilities of the project in the competition of Layer 2 solutions, demonstrating strong technological potential.

Changes in POW Sector: Performance of BCH, KAS, BSV

Coins in the POW (Proof of Work) sector, such as BCH, KAS, and BSV, have also shown strong performance recently. Especially after Trump's attendance at the Bitcoin conference, the prices of these coins surged significantly in the short term.

Following Trump's attendance at the conference, BCH, KAS, and BSV rose by 15%, 12%, and 18% respectively. The market believes that this is related to favorable policies for the mining industry announced by Trump at the conference. The popularity of POW coins has surged in a short period, with significant inflows of funds and traffic. Investors and analysts need to continue monitoring the attention these tokens receive from the mining community on social platforms such as YouTube and Telegram.

Furthermore, the increase or decrease in open interest contracts is also an important market indicator. For example, the open interest of BCH has recently increased, indicating an inflow of hot money into the market. Through contract data, the main capital flow in the market, such as the increase in long positions and the amplification of trading volume, can be observed, which are important references for judging market trends.

Conclusion

Bitcoin's price quickly corrected after breaking $70,000, demonstrating the high volatility and complexity of the market. Despite numerous positive news and policy support, the market performance of Bitcoin remains full of uncertainties. As more institutional investors participate in the Bitcoin market and global policy environments change, the future of Bitcoin remains uncertain. For investors, exercising caution, staying informed about market dynamics, and implementing appropriate risk management are key to dealing with this highly volatile market.

Subsequent focus should be on Bitcoin ecological projects such as SATS and CKB, as well as coins in the POW sector like BCH, KAS, and BSV. The performance of these projects and sectors will be significantly influenced by policy changes and market sentiment, and investors need to closely monitor relevant developments to make wise investment decisions.

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