Bitcoin holds above $30,700 after Fidelity jumps on the ETF bandwagon

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(Kitco News) – The cryptocurrency market saw a slight uptrend in prices on Tuesday after reports circulated that Fidelity is preparing to file for a spot Bitcoin (BTC) exchange-traded fund (ETF) in the immediate future, becoming the fifth firm to do so since BlackRock filed its paperwork on June 15.

Stocks also climbed higher, breaking a two-day losing streak as investors digested fresh economic prints that indicate the economy remains resilient despite recent turmoil. At the market close, the S&P, Dow and Nasdaq were all in the green, finishing up 1.15%, 0.63%, and 1.65%, respectively.

Data provided by TradingView shows that Bitcoin’s price spiked from $30,405 in the morning to a daily high of $31,082 shortly after the Fidelity story emerged, and has since pulled back to support at $30,800, where bulls now look to gather reinforcements for a run at the $31,200 resistance level.

BTC/USD Chart by TradingView

The ongoing positive developments for BTC resulted in July Bitcoin futures prices trading firmer in the early hours on Tuesday, according to Kitco senior technical analyst Jim Wyckoff.

Bitcoin futures 1-day chart. Source: Kitco

“The bulls have the solid overall near-term technical advantage as a steep price uptrend is in place on the daily bar chart,” Wyckoff said. “A bullish pennant pattern is also now forming on the daily chart.”

Additional insight into the recent performance of Bitcoin was provided by Matteo Greco, Research Analyst at Fineqia International, who noted that “BTC closed last week at $30,500, a 15.6% increase from the $26,300 price at the end of the previous week,” after the flurry of ETF filings.

“BTC traded around the $30,000 level in the last five days, also reaching the highest year-to-date price of about $31,500 during the trading session on Friday,” Greco said. “More important, it is the first time since February 2022 that BTC shows a positive delta on the year-on-year price metric.”

Greco said that while this development alone “does not tell us if the bear market is over and we are at the beginning of a new uptrend,” the “combination of good news on the macroeconomic level and the news concerning BTC adoption by institutions gave the market a boost to head towards a good Q2, following an already convincing Q1 in 2023.”

For now, BTC is leading the market uptrend, Greco said, citing the rising Bitcoin dominance, which recently hit a high of 51.5%. “This represents a steep increase from 49.70% at the end of the last week and 42.10% at the beginning of the year,” he said. “This data, combined with the low trading volume during 2023, confirms the trend of a less speculative environment during the last few months. Investors have rebalanced their portfolios towards a bigger BTC exposure, reducing the volatility and risk of their digital asset portfolio.”

Greco also touched on Bitcoin’s mining difficulty, the metric used to calculate the degree of difficulty required to mine new blocks of BTC, which is now at an all-time high.

“Since October 2022, the mining difficulty increase, and the tough market conditions have led to BTC’s mining price being higher than the BTC market price,” he said. “What this tends to do is to force miners to sell most of their mined BTC to keep their mining farms functioning. However, now we are currently seeing for the first time a premium of BTC price compared to BTC mining costs. If this trend follows, this could reduce the miners selling pressure of BTC and potentially lead to a continuation of the current uptrend.”

Altcoins piggyback on Bitcoin’s strength

Altcoins largely traded in the green on Tuesday as Bitcoin’s ability to hold its recent gains has given traders confidence to reengage with the broader crypto market.

Daily cryptocurrency market performance. Source: Coin360

Compound (COMP) was the top gainer with an increase of 14.3%, followed by a 13.43% gain for Blur (BLUR) and an 11.42% increase for Stellar (XLM).

The overall cryptocurrency market cap now stands at $1.19 trillion, and Bitcoin’s dominance rate is 50.1%.