Bitcoin traded higher on Tuesday, rising about 6% in the past 24 hours. Cryptocurrencies are in relief mode as selling pressures stabilize in a tight range between $ 30,000 and $ 40,000 from May. Traders watch for signs of surrender as Bitcoin appears to be oversold and shorts liquidate.

Crypto markets have been resilient despite regulatory crackdowns in China and the UK on Monday, Reuters reported that several companies have given up their efforts to register with the UK financial regulator amid increasing regulatory scrutiny.

“Prices soaring in the face of bad news can be a sign that sellers are exhausted to go up,” wrote David Grider, strategist at FundStrat, in a newsletter on Monday.

Current prices

  • S&P 500: 4291.67, + 0.025%
  • Gold: $ 1,761.22, -0.97%
  • 10-year Treasury yield closed at 1.475% compared to 1.472% on Monday

Where to from here

“We think this may be a choppy market for a while as prices resume their trend and we might even retest the $ 31,000 level, but overall we remain bullish for the remainder of the year,” wrote Grider.

From a technical perspective, Bitcoin’s long-term trend remains intact despite the loss of medium-term momentum. The $ 34,000 price level has prevented secondary support near $ 27,000 from becoming relevant, according to Katie Stockton, Managing Partner at Fairlead Strategies.

“We would see a breakout above the 50-day moving average [around $38,000] as a positive catalyst supporting a test of secondary resistance near $ 44,000, ”Stockton wrote in a report released Monday.

The big economic data point analysts anticipate this week is Friday’s U.S. jobs report, which could impact assets that are considered risky, including cryptocurrencies.

“If the employment figures are higher than expected on Friday, market participants could expect the Fed to raise interest rates earlier than expected,” wrote Alexander Blum, managing partner at the digital asset manager Two Prime, in an email to CoinDesk.

According to Blum, a strong job report could be bearish for digital assets in the short term, while a weaker than expected number would be bullish.

Returns collide

Bitcoin’s year-to-date return of around 20% outperforms the S&P 500 index but is behind the Thomson Reuters Core Commodity Index.

The chart shows the returns for Bitcoin, stocks and commodities since the beginning of the year.

Source: Koyfin

Over the past year, Bitcoin and Ether had similar risk-adjusted performance to popular U.S. stocks like Alphabet (NASDAQ: Goog) and Tesla (NASDAQ: TSLA).

The graph shows Sharpe ratios (risk-adjusted returns) for Bitcoin, Ether and popular US stocks.

Source: IntoTheBlock

Decoupling of the Bitcoin cycle

The current Bitcoin bull cycle has decoupled from the 2013 and 2017 cycles. This is due to a combination of factors including regulatory raids, environmental concerns, and an occasional tweet from Tesla CEO Elon Musk that interrupted the bull cycle in 2021.

“It’s important to note that each cycle is ultimately unique,” Coin Metrics wrote in a newsletter published Monday. “Each halving effectively signaled the start of a new cycle, with the 2013 cycle peaking 370 days after the first halving and the 2017 cycle 524 days after the second halving.”

Bitcoin is currently 413 days after the third halving, which occurred in May 2020, as shown in the graph below.

The chart shows the recent Bitcoin bull cycles.

Source: coin codes

Hedge funds reduce short positions

The open interest of Bitcoin futures at the CME Group in June is at an annual low, with the open interest currently standing at 1.39 billion US dollars, according to data from Skew.

It shows that hedge funds are now unwinding their short positions as cash and carry, a strategy that aims to capitalize on differences between the cash and futures markets, is no longer profitable, according to Arcane Research.

Hedge funds were short of $ 1.5 billion net short of Bitcoin contracts at their peak, and the number has dropped to $ 400 million, according to Arcane.

Open interest for Bitcoin futures at an annual low.

Source: Arcane Research

Altcoin summary

  • Ethereum transaction fees: Transaction fees for Ethereum have dropped to their lowest level since December as blockchain activity cooled while the use of Ethereum Layer 2 solution protocols like Polygon (MATIC) warmed. Gas refers to the computational effort required to perform certain operations on the Ethereum network. A fee paid in Ether is required to successfully conduct a transaction on Ethereum.
  • DeFi meets AI:, a Cambridge, UK-based artificial intelligence laboratory with a penchant for cryptocurrencies, has launched a risk-of-loss service in the experimental decentralized financial market (DeFi). The DeFi Agents Toolkit can be set to accept user funds from Uniswap v2 and PancakeSwap based on predefined conditions, such as: B. the drop in the exchange rate for a certain token to a certain level, can be withdrawn automatically.

Relevant news

Other markets

All but one digital asset on CoinDesk 20 landed higher on Tuesday.

Notable Winners as of 9:00 PM UTC (4:00 PM ET):