Bitcoin has experienced a surge in price and renewed optimism among traders and investors, driven by a combination of recent gains, speculation about policy shifts, and political endorsements. Over the past weekend, Bitcoin's price increased by nearly 10%, reversing previous losses and sparking hopes of a sustained bull market. Amidst this price action, discussions have emerged around China's potential easing of its Bitcoin ban and significant political support from leading figures in the United States. Despite mixed signals from derivatives markets, the overall sentiment points towards a cautiously optimistic outlook for Bitcoin's future.
The Dustiest Bitcoin Addresses: $88 Million in BTC Held in 100 Wallets
The top 100 "dustiest Bitcoin addresses" currently hold over $88 million worth of Bitcoin (BTC), having accumulated more than 530 BTC since January 2023. These dusty addresses, which refer to wallets containing minuscule amounts of Bitcoin (≤0.0001 BTC), provide an intriguing snapshot of Bitcoin's distribution and transaction history.
Dusty addresses are characterized by their small holdings, often remnants from past transactions or minor balances from various sources. Despite their size, these addresses collectively hold a significant amount of BTC. As of the latest data from BitInfoCharts, these addresses collectively possess approximately 1,380 BTC. Since January 2010, they have also processed transactions worth over $139 million.
Interestingly, the trend of accumulating small amounts of Bitcoin has gained momentum recently. Many of the smallest addresses are relatively new, with nine of the top ten having received their first transaction after March 2023. The newest address in the top 100 list is only five months old. This suggests a growing interest in Bitcoin even at the smallest levels of investment.
The top wallet among these dusty addresses is controlled by the Huobi crypto exchange. It holds 12.46 BTC, valued at approximately $792,000 at current rates. This address is particularly notable for its activity, having processed over 1.59 million transactions, which accounts for 0.77% of all Bitcoin transactions.
Another significant contributor to the dusty addresses list is F2Pool, a major Bitcoin mining pool. Seventy-eight of the top 100 addresses belong to F2Pool, with the largest among them holding 2.47 BTC, worth about $172,737. The rest of the dusty addresses are a mix of retail and institutional investors, making it challenging to differentiate between the two.
Despite the recent accumulation, a significant portion of these addresses remains inactive. According to BitInfoCharts, 82 of the top 100 dusty addresses have not seen any transfers in or out in 2024. This inactivity raises questions about the long-term intentions of the holders and the potential for future movement of these funds.
The Growing Number of Bitcoin Wallets
The number of Bitcoin wallets continues to grow, reflecting increasing interest and participation in the Bitcoin ecosystem. Data from Glassnode indicates a 5.5% increase in total Bitcoin addresses since the beginning of the year, reaching approximately 1.3 billion addresses as of July 14.
However, not all of these addresses are active. The number of active Bitcoin wallets with a non-zero balance is around 44 million. These non-zero addresses signify active participation and engagement with the Bitcoin blockchain, highlighting growing confidence in the network and the cryptocurrency ecosystem.
The steady increase in the number of non-zero Bitcoin addresses suggests a positive outlook for Bitcoin's future. The growing number of participants, from small investors holding dust amounts to major entities like Huobi and F2Pool, suggests a broadening base of Bitcoin adoption.
Bitcoin Surges 10%, Rekindling Bull Market Hopes Amid Newfound Optimism
Meanwhile, BTC has seen a remarkable 10% increase since the start of the weekend, igniting fresh optimism for a full return of the bull market. This surge comes after a period of sideways movement marked by liquidation cascades that pushed prices downward, leaving many traders and analysts eagerly watching for signs of a sustained upward trend.
Peter Brandt, a well-known trader and analyst, took to X to share his insights on Bitcoin's current market behavior. He suggested that Bitcoin might be unfolding a familiar pattern he described as "Hump...Slump...Bump...Dump...Pump." This pattern, according to Brandt, often indicates the different phases of Bitcoin's price corrections.
Brandt noted that the July 5 attempt at forming a double top was a bear trap, confirmed by the closing prices on July 13. He believes that the most likely scenario now is that bears are trapped unless Bitcoin closes below $56,000, which would negate his interpretation.
Other analysts, such as Rekt Capital, have been more decisive about Bitcoin's recent performance. Rekt Capital, another prominent trader, declared on X that "the Bitcoin Downtrend is over," suggesting that the market has finally broken away from its prior bearish behavior.
Supporting this claim, Rekt Capital shared a chart comparing current price action to historical patterns, particularly following Bitcoin's latest block subsidy halving in April. According to the chart, Bitcoin's price behavior has repeated historical trends, signaling the start of the "final phase of the BlowOffTop."
Adding to the bullish sentiment, economist Henrik Zeberg, head of macro at crypto analysis firm Swissblock, highlighted a significant bullish divergence on the relative strength index (RSI) values. Zeberg's daily BTC/USD chart pointed to this divergence as a critical factor in his assertion that the final bullish phase for Bitcoin had begun.
Beyond the technical charts and market behavior, Bitcoin bulls received a significant boost from Larry Fink, CEO of BlackRock, the world’s largest asset manager. In a July 15 interview with CNBC, Fink reiterated his support for Bitcoin, marking a significant shift from his previous skepticism.
Fink acknowledged that he was once a "proud skeptic" of Bitcoin. However, after studying and learning about the cryptocurrency, he has come to view it as a legitimate asset with significant potential. "My opinion five years ago was wrong. Here’s my opinion today, this is what I believe in today. I believe the opportunity today," Fink stated, emphasizing his newfound belief in Bitcoin's legitimacy.
BlackRock's Influence on the Market
BlackRock's endorsement of Bitcoin, particularly through its management of the world’s largest spot Bitcoin exchange-traded fund (ETF), has profound implications for the market. Bloomberg ETF analyst Eric Balchunas commented on the importance of Fink's endorsement, noting that it provides credibility and comfort to traditional financial advisors and investors. This mainstream acceptance could pave the way for broader adoption and integration of Bitcoin into everyday investment portfolios.
Bitcoin's recent 10% surge has reignited hopes for a return to the bull market, buoyed by both technical indicators and influential endorsements. The combination of positive market patterns, such as the Hump...Slump...Bump...Dump...Pump formation, bullish divergences on RSI, and strong institutional support from figures like Larry Fink, paints an optimistic picture for Bitcoin's future.
As the market continues to evolve, the sustained interest from major financial institutions and the increasing number of bullish signals could propel Bitcoin to new heights. Whether this marks the beginning of a long-term upward trend remains to be seen, but the current sentiment suggests that Bitcoin is poised for a promising trajectory in the months ahead.
Speculation Surrounds China’s Potential Policy Shift
Some traders attribute BTC’s recent recovery to speculation that China may lift its long-standing ban on Bitcoin, though no official confirmation has been received from the Chinese government.
Despite the positive sentiment and a leading US presidential candidate expressing support for Bitcoin, BTC derivatives markets do not share the same enthusiasm. Market participants are questioning whether there is enough demand to surpass the $65,000 barrier and sustain the recent weekend gains.
Analysts have dismissed the rumors regarding China's potential policy shift, asserting that the country is unlikely to permit its citizens to freely trade Bitcoin using the local Renminbi currency. Mikko Ohtamaa, co-founder of the algorithmic investment protocol Trading Strategy, highlighted that a significant change in China's stance on Bitcoin would contradict the government's efforts to curb "capital flight." Furthermore, Chinese investors are currently prohibited from investing in spot Bitcoin and Ethereum exchange-traded funds (ETFs) in Hong Kong, despite its close ties with mainland China.
The Republican National Committee (RNC), with former US President Donald Trump as its leading candidate, passed a draft policy platform on July 8. The platform aims to "defend the right to mine Bitcoin and ensure every American has the right to self-custody of their digital assets and transact free from government surveillance and control." It also accuses Democrats of engaging in an "unlawful" crackdown on cryptocurrencies.
Will Clemente, founder of crypto research firm Reflexivity Research, suggested that Bitcoin's recent gains indicate a higher likelihood of Trump being elected as the next US president in the upcoming November election. Analysts noted that Bitcoin's bullish momentum increased during Trump's Pennsylvania rally, coinciding with the former president surviving an assassination attempt. This has led the market to anticipate more favorable regulations compared to the current policies under the Biden administration.
Assessing Market Confidence Through Perpetual Futures Funding Rate
To determine whether crypto traders are gaining confidence in $63,000 becoming a support level, it is essential to analyze the perpetual futures funding rate. This indicator, typically updated every eight hours, reflects the demand for leverage among buyers (longs) and sellers (shorts). While the size of positions is equal on both sides, a positive funding rate indicates that longs are paying for leverage.
Data from Coinglass shows a relatively neutral funding rate of 0.005% per eight hours, equivalent to 0.10% per week. This cost is negligible for most traders and significantly lower than the 1.5% level associated with bullish markets. To further confirm the absence of widespread optimism, it is crucial to examine Bitcoin's monthly futures.
Professional traders often prefer monthly contracts due to the absence of a funding rate. In neutral markets, these instruments trade at a premium of 5% to 10% to account for their extended settlement period.
According to data from Laevitas.ch, the BTC futures premium increased to 11% on July 15, surpassing the neutral range of 10% for the first time in nearly two weeks. This level suggests moderate optimism, particularly encouraging given that Bitcoin is still 14% below its all-time high of $73,757 in March.
The relatively stable funding rate for perpetual contracts should not concern traders. The less confident investors are that the $65,000 level will be reclaimed, the greater the potential for a surprise rally. This uncertainty can trigger forced liquidations of short positions, further propelling Bitcoin's price upward.
