Both bitcoin and ether have clawed back gains after an intense selloff throughout the weekend that bled into Monday.
Ledn’s John Glover gave some insight into the levels he’s currently keeping a close eye on when looking at bitcoin’s chart. $49,000 — a figure noted Monday in the Empire newsletter — remains the “critical” level to watch, he said. So far, bitcoin’s firmly above $50,000 after hitting a low of $49,000.
Another key level sits between $68,000 and $72,000.
Read more: Bitcoin bounces back as ETH ETFs notch $49M in net inflows
“If we can overcome the $60,000 to $62,000 and stay there for a couple of days, that probably opens up the top side to make that final push and hopefully break through the $72,000 to $73,000. I do expect that we’re weeks away from succeeding in that. So I think it’ll happen sometime in September, maybe even early October, but that is still what I’m looking for,” Glover told me.
Given the correlation between bitcoin and equities, which once again became clear this weekend, this is both a “technical and macro driven breakdown,” Galaxy’s Alex Thorn wrote in a note. Crypto fundamentals, when isolated, actually look pretty good, he said.
“This move lower has not been characterized by long-term holder capitulation. The portion of bitcoin’s supply held by long-term holders has been rising since mid-April, and long-term holders have net-grown their positions every day since July 22, with today seeing the largest positive net position change since September 2023,” Thorn said.
Read more: Empire Newsletter: A weekend selloff spooks crypto
Glover noted that Ledn’s seen liquidations and there have been quite a few big wipeouts in the market since this weekend. As of Monday morning, liquidations were over $1 billion, per CoinGlass data.
“I think that that’s going to have created a bit of an overhang for the next little while, as people are kind of licking their wounds before they jump back in,” he told me.
The digital gold argument is also back in play thanks to this weekend’s selloff, but Glover says bitcoin is an asset class, not “just digital gold.”
“Bitcoin is a store of value, but it’s also a volatile asset class where people are going to be much more active in getting in and out of positions than they are holding gold forever,” he said. “Now that we have a big contingent that’s buying and selling more actively, we have to start looking at crypto alongside the other asset classes and [look] at it as more of a risk asset than just a store of value.”
Read more: Bitcoin could be a ‘store of value’, says Goldman Sachs CEO
Thorn noted: “Unlike gold, bitcoin is not yet widely held by sovereigns, central banks or institutional investors. While we’re seeing some uptake among these cohorts, bitcoin’s institutional and nation-state story is still very much in the early innings. Thus, many investors view bitcoin as a venture-like bet on its future as digital gold, hence the higher return profile [compared to] gold.”
Fedrico Brokate, head of US business development at 21Shares, told Blockworks that he thinks we’ll soon have digested a lot of this news and the market will have a better idea of how to proceed come Friday (barring any new developments).
For 21Shares, which has both bitcoin and ether ETFs in the US, there’s a “silver lining.”
Read more: 21Shares exec talks US crypto ETF adoption, where we go from here
“I think whenever you have any one of these market moments or downturns, especially of this magnitude, it’s a real test, especially for a new vehicle or a new asset class like the one that we operate in,” he said.
Brokate said that the moment reminds him of 2020, when analysts questioned the ETF play and how it would fare amidst a downturn.
This, he thinks, could turn out to “be a fantastic tailwind for the digital asset industry going forward, because these products are operating exactly as they should, and we’re not really seeing any issues, whether it be with our trading partners, with the market makers, with a custody solution […] everything is flowing and working well and trading within the spreads that we would want it to.”
