Bitcoin Stuck in a Range – But Bullishness Remains

Bitcoin is trading at $67,345, down %3 from 7 days ago, and still stuck in a range at high prices, but unable to push on to new highs. Even so, while Bitcoin is trading under $70,000 per coin, this represents a nearly 400% increase from its late 2022 lows. The market is bracing for a volatile 2024 presidential election and the long-awaited dovish pivot from the Federal Reserve.

Amidst this financial uncertainty, Treasury Secretary Janet Yellen has raised alarms about the escalating $34 trillion U.S. debt. “We’ve raised the interest-rate forecast,” Yellen told Bloomberg at a Group of Seven finance ministers meeting in Italy. “That does make a difference. It makes it somewhat more challenging to keep deficits and interest expenses under control.”

Can Bitcoin Help the Debt Crisis?

Former U.S. president and 2024 Republican hopeful Donald Trump has reportedly inquired if Bitcoin could help solve the national debt crisis. Colin Wu reported that David Bailey, CEO of Bitcoin Magazine and a Trump campaign cryptocurrency aide, said that the first time he met Trump, Trump asked if Bitcoin could do anything about the $35 trillion debt.” Bailey and other advisers are said to have ongoing crypto discussions with Trump.  Bailey has urged the public to attribute the recent Bitcoin price surge to Trump. “It’s important everyone calls this the Trump pump, gives Trump full credit, and to thank him and congratulate him if you have the opportunity,” he posted on X.

Trump, now accepting crypto campaign donations after profiting from selling NFTs, criticized President Joe Biden’s stance on cryptocurrency. “Biden wants bitcoin and crypto in the U.S. to die a slow and painful death,” Trump asserted. He expressed his support for the crypto industry, stating on Truth Social, “I am very positive and open minded to cryptocurrency companies, and all things related to this new and burgeoning industry.”

Renewed Bullishness

BlackRock’s spot Bitcoin ETF has surpassed Grayscale’s to become the world’s largest fund after a $102 million inflow on Tuesday. BlackRock’s IBIT now holds nearly $20 billion worth of Bitcoin, compared to GBTC’s $19.7 billion, which saw $105 million in outflows on the same day.

Recent buying activity for IBIT has surged amid bullish sentiment for Bitcoin and the broader crypto market. The bulls gained momentum following the approval of Ether ETF filings and renewed support for crypto among U.S. political parties. This marked a significant turnaround for IBIT, which had experienced low or zero inflows before May 15 and its first-ever day of outflows in April, contributing to bearish sentiment at the time.

Despite renewed bullishness, Bitcoin has been stuck in a price consolidation phase between $60K and $72K for over two months, frustrating short-term holders who anticipated significant price surges. Bitcoin analyst Willy Woo sees this consolidation as positive for eventual upside potential. “This 2.5 months of consolidation under bullish demand has been very good for Bitcoin, it means the price has more room to run before topping out,” Woo stated on X.

Woo’s projection is based on the Bitcoin Macro Oscillator (BMO), a momentum metric that includes key indicators such as MVRV (Market Value to Realized Value), VWAP (Volume-Weighted Average Price), CVDD (Cumulative Value Days Destroyed), and the Sharpe ratio. The BMO filters out short-term price noise to indicate whether BTC has bottomed or topped from a long-term perspective. In the 2017 and 2021 market cycles, BTC peaked when the BMO hit 1.8. Currently, the indicator is below 1, suggesting there is still room for upward movement. Woo predicts that the BMO could reach 1.8 again, providing more room for BTC’s price to rise.

Source: Bitcoin Macro Oscillator via X

Veteran trader Peter Brandt has highlighted Bitcoin’s performance relative to gold, noting that while Bitcoin has been gaining ground, it has yet to surpass its 2021 highs. In 2021, Bitcoin hit over $64,000 in April and nearly $69,000 in November. By March 2024, Bitcoin rose to $73,750 amid optimism about halving events and Bitcoin ETFs, but it has not reclaimed its peak against gold. Brandt tweeted that on an inflation-adjusted basis and in relation to gold, Bitcoin hasn’t penetrated the 2021 highs despite the positive developments. He noted that Bitcoin’s steady outperformance of gold in recent months reflects growing investor confidence in its long-term value. However, Brandt emphasized that new highs are needed to confirm a bull trend for Bitcoin.

Wood Supports Bukele

El Salvador’s GDP could increase tenfold over the next five years if it continues its Bitcoin and artificial intelligence adoption plan under President Nayib Bukele, according to ARK Invest CEO Cathie Wood. “President Bukele’s determination to turn El Salvador into an oasis for the Bitcoin and AI communities — two of the biggest economic and technology revolutions in history — is why I believe its real GDP could scale tenfold during the next five years,” Wood stated on X after meeting with Bukele.

Wood and Keiser meet with Bukele

During their meeting, Wood and Bukele discussed the integration of Bitcoin into capital markets, AI, and tax policies. Max Keiser, a Bitcoin advisor to Bukele, mentioned that Wood presented a plan to increase El Salvador’s GDP to $300 billion by 2029. Other attendees included Bitcoin advocate Stacy Herbert, U.S. economist Arthur Laffer, and ARK Invest research associate Marc Seal.

El Salvador’s GDP was $32.4 billion in 2022, up over 30% since Bukele took office in June 2019, according to World Bank data. Reaching $300 billion would put the country on par with Romania, the Czech Republic, and Chile. Since Bukele’s first term, El Salvador has made Bitcoin legal tender, eliminated taxes related to tech innovation, and removed income tax for foreign investments and remittances. In April 2024, Google expanded into the country with a $500 million strategic partnership. El Salvador’s treasury holds 5,764 Bitcoin, worth $396.2 million, marking a 58.6% increase from its average purchasing price.

Finally, another company has followed MicroStrategy’s lead and adopted Bitcoin as a treasury asset. Semler Scientific, Inc. a leader in healthcare technology, announced that its board of directors has adopted Bitcoin as its primary treasury reserve asset. The company has purchased 581 bitcoins for a total of $40 million, including fees and expenses.

“Our Bitcoin treasury strategy underscores our belief that Bitcoin is a reliable store of value and a compelling investment,” said Eric Semler, chairman of Semler Scientific. “With a market value exceeding $1 trillion, Bitcoin is a major asset class. Its unique characteristics as a scarce and finite asset make it a reasonable inflation hedge and a safe haven amid global instability. We believe Bitcoin’s digital resilience makes it preferable to gold, which has a market value approximately ten times that of Bitcoin. Given this value gap, we see significant potential for Bitcoin to generate outsized returns as it gains acceptance as digital gold.” As Semler Scientific continues to generate revenue and free cash flow from sales of QuantaFlo, it will evaluate the use of excess cash, with Bitcoin serving as its principal treasury holding, subject to market conditions and anticipated cash needs.