Bitcoin clings to $50K
Bitcoin,  Ethereum,  Markets Report

Markets Report: Bitcoin clings to $50K

The second-highest weekly close in history fuels optimism among bulls yet rangebound behavior remains

Bitcoin is riding high at $50,000 as it starts a new week’s trading and markets react to approval of $1.9 trillion in coronavirus stimulus. 

After a weekend of gains, Bitcoin is back trying to make sense of the significant psychological $50,000 mark, with bulls going for a resistance flip.

Modern Consensus takes a look at what the coming few days might have in store for Bitcoin traders. We also publish a weekly markets summary every Friday. 

Analyst: $52,000 “breaker” for more upside

With everything to play for, Bitcoin is once again tackling $50,000 as volatility keeps overall market trajectory uncertain. 

With the weekend producing near 7% gains, rangebound behavior still characterizes the mood as BTC/USD remains near its position from the same time last week. 

“Bitcoin is stuck inside a range -> boring March,” popular trader Michaël van de Poppe summarized on the day.  

“Clearly has to break above the $52K breaker to see continuation here towards $56K. On the downside: Failing to hold $46,500 and I’ll assume we’ll see a lows test at $42,000.”

Van de Poppe expects March to play out in a similar fashion to years gone by—this month traditionally sees lackluster performance across crypto markets, followed by fresh action nearer the summer. 

Macro moves may support that thesis. News that the U.S. Senate had confirmed Joe Biden’s $1.9 trillion stimulus package, which includes $1,400 direct payments to Americans, failed to have a significant impact on BTC/USD performance.

Likewise, Monday’s falling stock markets and conversely bullish oil and U.S. dollar have not so far triggered a divergence from business as usual for the largest cryptocurrency. 

Price upside was nonetheless sufficient to provide Bitcoin with its second-largest weekly close ever, less than 15% off all-time highs of $58,300. 

Bitcoin clings to $50K

BTC/USD focuses on $50,000. Source: Tradingview

China, Norway provide new institutional buys

Amid the macro developments, the now familiar practise of institutional Bitcoin allocations is continuing. 

This week, it is Chinese photo app Meitu making headlines as the company announces an $18 million Bitcoin buy-in, along with $22 million in Ether. A rare announcement from China, Meitu additionally hinted that it may add to its position in the future.

“Subsequent purchases or sales of cryptocurrencies pursuant to the cryptocurrency investment plan will be executed at the board’s discretion according to market conditions,” a filing states quoted by various sources including South China Morning Post

Joining Meitu was a new company, Seetee, the latest venture from Norwegian holding company Aker Group, which will focus on mining and other investment outlets within the Bitcoin ecosystem.

Confirmed on Monday, Seetee has purchased 1,170 BTC to make Bitcoin its only treasury asset.

“Aker is the first ma­jor com­pa­ny in Scan­di­navia to al­lo­cate cap­i­tal to bit­coin. We’re not go­ing to be the last,” a letter to shareholders reads.

Seetee additionally highlighted a partnership with technology firm Blockstream, with a tweet stating the firm is “excited about the potential in merging Aker’s industrial capabilities and experience with Blockstream’s leading position in Bitcoin.”

Ethereum confirms milestone upgrade

On altcoin markets, news of a major change to Ethereum dominated discussions after approval of an upgrade which will limit its supply. 

EIP 1559, set to go into effect in the summer, finally permits users to calculate gas fees and will feature token burning. This effectively ends a slew of accusations around Ethereum’s monetary policy—Bitcoin proponents had constantly argued that a de facto infinite supply was the largest altcoin’s Achilles’ heel. 

ETH/USD has gained around 17% since the news was announced. 

Bitcoin clings to $50K
Ethereum upends its downtrend as EIP 1559 is confirmed. Source: Tradingview

In a blog post, David Hoffmann, chief of operations at real estate disruptor RealT, described EIP 1559 as the “final piece of the puzzle in Ethereum’s monetary policy.”

“EIP 1559 makes all usage of Ethereum directly add to the scarcity of Ether. No longer do you need to be an ETH-Staker in order to be exposed to the upside of the growth of the Ethereum economic system,” he concluded.

The overall biggest weekly mover, however, is SushiSwap, which has climbed over 40% after launching contracts on five new networks, partly in response to Ethereum’s high gas fees which have become a feature of its rise this year.

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Anthony Bevan is a journalist focusing on disruptive finance and cryptocurrency, along with the changing face of the market as Bitcoin gains mainstream adoption. Journalists covering cryptocurrency for Modern Consensus May hold positions in some of the currencies they write about.