Bitcoin traders are setting their sights on $70,000 as they anticipate a bullish trend driven by a more favorable macroeconomic environment and the prospect of a pro-crypto administration in the U.S. under former President Donald Trump. This optimism comes despite recent volatility and ongoing concerns regarding the Mt. Gox repayments.
The broader sentiment in the crypto sector has been buoyed by several key factors, including reduced selling pressure from major wallets and a brighter political outlook. Senior analyst Lucy Hu from Metalpha shared her insights with CoinDesk, noting that the market’s rebound in Bitcoin price reflects a more optimistic near-term outlook. Hu highlighted the influence of Trump’s vice presidential pick, suggesting it indicates a potential crypto-friendly administration and policies.
Bitcoin (BTC) has been showing signs of stability around its 120-day moving average, a crucial technical indicator used to determine long-term trends. Hu suggests that BTC has the potential to reach $68,000 or even $70,000, provided that Federal Reserve policies and the implications of the Mt. Gox repayments are monitored closely.
The 120-day moving average sums price data over time to indicate the direction of a trend, making it a widely-used tool among traders. Recent weeks have seen Bitcoin’s price fluctuate significantly, dropping to as low as $53,500 in early July due to the start of Bitcoin repayments by wallets from the defunct exchange Mt. Gox. This event triggered bearish predictions, but favorable developments have since reignited bullish sentiment.
One of the pivotal factors contributing to the bullish outlook is the political climate in the U.S. Republican candidate Donald Trump’s pro-crypto stance has brought renewed hope to the market. Trump’s choice of Ohio Senator JD Vance as his 2024 running mate has further fueled optimism. Vance is known for his favorable view of cryptocurrencies and held up to $250,000 worth of BTC in 2022.
Nick Ruck, head of growth at BitU Protocol, shared his perspective on the evolving sentiment. He pointed out that a shift in the U.S. political landscape could lead to more favorable policies toward Bitcoin and other digital assets, as the elections aim to attract single-issue voters and special interest groups. Additionally, Ruck noted the long-term impact of reduced selling pressure as Mt. Gox distributes funds to creditors.
The Mt. Gox repayments have been a source of concern for the Bitcoin market. The defunct exchange, which was once the largest in the world, lost around 850,000 BTC in a 2014 hack. The ongoing repayment process to creditors has the potential to flood the market with significant amounts of Bitcoin, creating downward pressure on prices. However, recent developments suggest that some of the selling pressure may be alleviated.
Wallets linked to the German state of Saxony have reportedly emptied their entire stack of Bitcoin, reducing the immediate risk of large sell-offs. This move, coupled with the positive political developments, has contributed to the renewed bullish sentiment.
The market’s reaction to these developments has been overwhelmingly positive. The of the controlled token release and the extension of the lock-up period from three to five years for 80% of the tokens have instilled confidence among investors. The unlocking process, now spanning four years and concluding in July 2028, is expected to reduce market volatility and support the long-term growth of the Worldcoin ecosystem.
Vincent Maliepaard, Marketing Director at IntoTheBlock, emphasized the importance of understanding token unlock schedules. He explained that linear unlocks tend to diffuse market impact over time, while cliff unlocks can cause abrupt shifts. By closely monitoring unlock schedules, investors can better understand growth potential and adjust their strategies accordingly.
Worldcoin’s tokenomics have faced scrutiny, particularly concerning its low float ratio. A CoinGecko report highlighted that Worldcoin has the lowest float ratio among the top 300 cryptocurrencies by market capitalization, with a ratio of 0.02. This low float ratio indicates that limited tokens are available in circulation, potentially leading to heightened volatility as more tokens are unlocked.
Despite these concerns, Worldcoin continues to attract a growing user base. Over 6 million individuals currently hold an orb-verified World ID, a digital passport that verifies a user’s identity and allows access to the network. The allocation of WLD tokens to verified World ID holders remains unchanged, with over 211 million tokens claimed to date. This represents over 77% of the 275 million WLD in circulation.
Tools for Humanity’s decision to release 2 million WLD tokens daily instead of the initially planned 3.3 million is a strategic move aimed at managing market supply and supporting the token’s value. By controlling the influx of tokens into the market, the company aims to provide a more measured increase in circulating supply, minimizing potential disruptions.
The positive market reaction to this declaration underscores the importance of strategic decisions in the cryptocurrency space. The significant price increase following the declaration suggests that investors are confident in the company’s strategy to manage the token supply and support its value. This confidence is crucial for the long-term success of the Worldcoin project.
While the controlled release of tokens is designed to stabilize the market, there are potential risks associated with this strategy. The gradual increase in token supply might lead to selling pressure from early investors looking to realize profits. This selling pressure could impact the token’s price and lead to market volatility. However, the extended lock-up period and the company’s efforts to manage the token supply are expected to mitigate these risks.
Bitcoin traders are optimistic about the potential for BTC prices to reach $70,000, driven by a more favorable macroeconomic environment and the prospect of a pro-crypto administration in the U.S. under Donald Trump. The controlled release of tokens and the extension of the lock-up period are positive steps toward managing market supply and supporting the token’s value. As Worldcoin continues to grow and attract more users, the project’s success will depend on the company’s ability to manage the token supply and maintain a stable and trusted network.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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