Cryptocurrencies rebounded on Wednesday as short sellers hedged positions before Tesla CEO Elon Musk appeared on The B Word conference . Bitcoin was trading at around $ 32,000 at the time of publication and has risen 8% in the past 24 hours. The strong price rebound reflects positive sentiment in an attempt to reverse a one-month downtrend largely due to regulatory uncertainty.
Au During The B Word conference on Wednesday, Musk reinforced the bullish sentiment by announcing that SpaceX, one of the companies he founded, holds bitcoins on its balance sheet. Musk also stated that he personally possessed ether. The announcement helped drive cryptocurrency prices up on Wednesday, with ether surpassing $ 2,000 for the first time since July 14. Tesla CEO Elon Musk speaks during a live broadcast of the conference Wednesday's B Word. (The B word) Source: Glassnode
TouT well considered, the futures market is predominantly bearish, leaving the door open for strong corrective increases in the price of bitcoin. When leverage is skewed to the bearish side, a higher movement often results in a f forced closing of short positions (square off shorts exchanges). This, in turn, puts upward pressure on the price of the cryptocurrency, leading to exaggerated price movements.
Crypto sentiment has hit a new low, according to some "fear / greed" metrics. It is likely that extreme fear drove shorts to cover positions as bitcoin fell below $ 30,000 on Tuesday.
"Many indicators lean towards a generally fearful environment at the moment ", Arcane Research wrote in a research note Tuesday.
Arcane warned that investors should be wary of the timeliness of certain fear measures / greed, especially in traditional markets.
"Keep in mind what happened as fear loomed in March 12 December 2020, when the The CNN Fear & Greed index has reached an extremely low level of 3 ", Arcane wrote. The S&P 500 then fell nearly 25%.
Retailer interest slows
Google searches for bitcoin have declined since March 2020, coinciding with the crypto-disabled sale. The current level of relative interest in research is not yet at its low in 2017, which "could be a sign that many investors are retail and the general public were already aware of Bitcoin before the recent price movements thisyear ", Coin Metrics wrote in a Tuesday newsletter. The graph shows Google search interest in Bitcoin over time. Source: Metric Metrics
"Insti Institutional adoption is a big reason for Bitcoin 's recent successes in 2020/2021, which will not be easily captured by the interest of Google search, ”Coin Metrics wrote.
A similar scenario is seen in interest in Ethereum, which has benefited from the popularity of decentralized finance (DeFi) over the past year. Graphic That's how Google search interest in Ethereum over time. Source: Coin Metrics
Bitcoin miner resilience
Bitcoin miners arestill accumulate cryptocurrency, although some miners migrate to other places after China starts cracking down on crypto mining. "It is possible that the additional selling pressure from the struggling offline miners will be more than offset by the extraordinary profitability of the remaining operational miners, " Glassnode wrote. The graphic shows bitcoin miner's net position change. Source: Glassnode
Stablecoins in the spotlight
A day after the Circle stablecoin issuer released more asset data behind the 'USDC, other issuers are trying to showcase their efforts in transparency.
Tether executives took part in CNBC's online show " Tech Check "to answer questions about the USDT. An audit for Tether, issuer of the largest stablecoin, the USDT, could be" months away, not years, "StuartHoegner, General Counsel for Tether, says in Wednesday's interview.
Meanwhile, Paxos published a breakdown in the reserves of its stablecoins, PAX and BUSD, for the first time: Some 96% of the reserves were held in cash and cash equivalents, while 4% was invested in US Treasuries as of June 30.
The said that cryptocurrency prices could fall under securities laws.
Most of 20 digital assets ended up higher on Wednesday. In fact, everything was in the green with the exception of the dollar-linked stablecoins.
Notable winners at 9:00 p.m. UTC (4:00 p.m. ET):
aave (AAVE) + 11.84%
the Graph (GRT) + 11.41%
polkadot (DOT) + 10.15%