Bitcoin briefly retreated after breaking through the $70,000 mark.

On July 30, 2024, the price of Bitcoin (BTC) briefly broke through the $70,000 mark after experiencing over a month of stagnation, reaching a high of $70,050. This price peak triggered widespread attention and discussion in the market, with many investors and analysts beginning to speculate whether Bitcoin would reach new highs. However, due to the market's high volatility and unpredictability, this peak could not be sustained, and the price of Bitcoin quickly retraced. This situation serves as a reminder to investors that there are significant risks and uncertainties in the cryptocurrency market.

Nashville Bitcoin Conference Boosts Market Sentiment

The recent short-term surge in Bitcoin prices can be partly attributed to the Bitcoin conference taking place from July 25 to 27, 2024, in Nashville, Tennessee, USA. This conference has attracted global attention due to its scale and influence, as well as the attendance and speech of Trump. Trump's remarks and proposals sparked widespread discussion and market reactions at the conference.

Trump's Remarks and Proposals

Trump proposed a series of bold suggestions regarding Bitcoin at the conference, including the establishment of a U.S. Bitcoin strategic reserve and replacing the current chairman of the U.S. Securities and Exchange Commission (SEC). He believes that these measures will help the U.S. gain a leading position in the global cryptocurrency arena. Furthermore, Trump claimed that the U.S. would become the center of global cryptocurrency, even becoming a "Bitcoin superpower." These statements sparked heated discussions at the conference and had a direct impact on the Bitcoin market, driving a brief price increase.

Other Important Speeches Drive Market Expectations

In addition to Trump, the speeches of other important figures also garnered widespread attention at the conference. For example, a presidential candidate in the United States stated that if elected president, he would sign an executive order directing the U.S. Treasury to purchase 550 Bitcoins daily until the reserves reach 4 million BTC. He believes that this move would significantly enhance the valuation of Bitcoin and could even push its market capitalization to several trillion dollars. Additionally, he proposed changing the IRS policy so that transactions between Bitcoin and the U.S. dollar would not need to be reported and would not be subject to taxes.

A U.S. senator also expressed strong support for Bitcoin at the conference. She suggested that the U.S. government purchase 5% of the total supply of Bitcoin and hold it for at least 20 years. This proposal was supported by the founder of a large tech company, who predicted that by 2045, the price of Bitcoin could reach $49 million. The head of digital assets at a large asset management company called on investors to actively purchase Bitcoin ETFs (Exchange-Traded Funds). He pointed out that almost all buyers of the ETF are long-term holders, as evidenced by the fact that in the past six months, the ETF only experienced net outflows on one day. These statements reflect an optimistic attitude among some institutions and individuals regarding the long-term prospects of Bitcoin.

Market Correction: Risks and Uncertainties

Despite a series of positive remarks and market activities supporting it, Bitcoin quickly retraced after breaking through $70,000 in the short term, which may be related to the market's expectations of a potential pullback for Bitcoin after the conference. A report released during the conference indicated that the implied volatility in the Bitcoin options market had once soared but has recently shown a decline. This change may suggest a slight consolidation in Bitcoin's price in the short term.

On the morning of July 30, a famous Bitcoin address again made a small test transfer (0.02 BTC). Considering that this address has made substantial large transfers after similar operations in the past, this has intensified market panic and further amplified the correction. It is reported that the low point of the correction that day appeared around 8:15, shortly after the news broke. This event once again reminds investors that the volatility and uncertainty of the Bitcoin market are still very high.

Performance of the ETF Market: Optimism Among Institutional Investors

Despite the fluctuations in the Bitcoin market, the performance of the ETF market remains strong. According to monitoring data, on July 29, the net inflow of the U.S. Bitcoin spot ETF was $123.1 million. This means that in the past half-month (counting only trading days), there was only one day of net outflow in the ETF market, while all other trading days maintained positive inflows. This data indicates that institutional investors remain optimistic about the long-term prospects of Bitcoin.

Attention to Bitcoin Ecological Projects

With the fluctuations in Bitcoin prices, some Bitcoin ecosystem projects have also attracted the attention of investors. In particular, some projects closely related to Bitcoin, such as SATS and CKB, have received more attention.

SATS is a leading BRC inscription project in the Bitcoin ecosystem with meme attributes. Recently, SATS has shown strong performance relative to ORDI, and the market expects that there may be positive news forthcoming. CKB, on the other hand, is a Bitcoin Layer 2 project based on the extended protocol RGB++, aimed at addressing the shortcomings of the Bitcoin ecosystem. CKB continues to enhance the technical level of the project in the competition of Layer 2 solutions, demonstrating strong technical potential.

Movements in the POW Sector: Performance of BCH, KAS, and BSV

The coins in the POW (Proof of Work) sector, such as BCH, KAS, and BSV, have also performed well recently. Especially after Trump attended the Bitcoin conference, the prices of these coins have risen significantly in the short term.

BCH, KAS, and BSV rose by 15%, 12%, and 18% respectively after Trump's attendance at the conference. The market believes this is related to Trump's favorable policies for the mining industry announced at the conference. The popularity of POW coins has significantly increased in a short period, with substantial inflow of funds and traffic. Investors and analysts need to continuously monitor the attention that miners are paying to these tokens on social platforms.

In addition, the increase or decrease in open interest is also an important market indicator. For example, the open interest of BCH has recently increased, indicating that there is hot money flowing into the market. By analyzing contract data, we can observe the movements of major funds in the market, such as the increase in long positions and the expansion of trading volume, all of which are important references for judging market trends.

Summary

The price of Bitcoin quickly retraced after breaking through $70,000, demonstrating the market's high volatility and complexity. Despite numerous positive news and policy support, the market performance of Bitcoin remains full of uncertainty. As more institutional investors participate in the Bitcoin market and the global policy environment changes, the future of Bitcoin is still full of variables. For investors, maintaining caution, keeping an eye on market dynamics, and implementing appropriate risk management is key to navigating this highly volatile market.

Key areas to focus on in the future include Bitcoin ecosystem projects such as SATS and CKB, as well as coins in the POW sector like BCH, KAS, and BSV. The performance of these projects and sectors will be significantly impacted by policy changes and market sentiment, so investors need to closely monitor relevant developments to make informed investment decisions.