Institutional adoption by companies like MicroStrategy and Square has driven the current Bitcoin cycle. Banks are among the traditional financial institutions that explore offering cryptocurrency-based products in partnerships with exchanges like Coinbase.
The infrastructure law that the US Senate recently passed could restrict the industry of Bitcoin (BTC) and other cryptocurrencies.
However, the first cryptocurrency is trading around USD 47,130, which implies an increase of 7.6% compared to August 9th. From the local minimum of USD 29,000 that it reached on July 20th, it has recovered by 58%.
The law promoted through a bipartisan agreement will consider the profits from cryptocurrency operations for tax purposes. The bill will need the approval of the US House of Representatives to become a final law. The market has not yet reacted negatively to the enactment of this legislation by the Senate.
The Price of Bitcoin Breaks USD 46,000 and the Golden Crossing Appears
The dominant upward trend in the last week led to the breakout of the USD 46,000 resistance. The price of Bitcoin exceeded that level and resumed it after three daily red candlesticks. This rally would make the fourth consecutive week of the rise in the value of the cryptocurrency.
Some analysts warned that a pattern associated with an upward movement was about to appear. Experts from @RektCapital recently announced that the golden crossing pattern was about to occur. Four days later, the 50-day moving average crossed the 200-day moving average in an upward direction.
The Weekly Chart Indicates Institutional Investment Since 2013
The main driver of the current Bitcoin cycle has been institutional adoption. Last year, companies like MicroStrategy and Square made announcements while recognized investors made individual pronouncements. In the case of institutional initiatives on Bitcoin, they had been occurring for at least eight years.
The latest weekly chart reflects institutional investment in Bitcoin since 2013, with corporations including Bitcoin as a treasury reserve. However, it also shows Bitcoin ETFs (exchange-traded funds) approved in Canada and other countries. According to the graph, they represent more than 680,000 BTC while corporations hoard more than 180,000 BTC.
US Banks Are Still Interested in Bitcoin
The latest quarterly report from Coinbase indicates that the PNC Bank is among the traditional financial institutions exploring cryptocurrency-based products. The exchange referred to its focus on institutional investment in Bitcoin, noting that more than 9,000 institutions are its clients.
Besides, Coinbase reflected that the trading volume of Bitcoin, 24% of the total volume, fell below that of Ethereum. Compared to the second quarter of 2020, the trading volume of BTC grew by 670% in late June, while that of ETH increased by 1,382% in one year.
Ether Leaves Exchanges Alongside BTC
The decline in Bitcoin inventories on exchanges has appeared to be a bullish signal on several occasions.
The returns of Ethereum (ETH) have exceeded those of Bitcoin in this bullish cycle. Therefore, the inventories of ETH on centralized exchanges have reached a minimum value of 9.4% of the supply. The second cryptocurrency, whose price recently exceeded USD 3,000 again, is trading around USD 3,200, according to CoinGecko.
By Alexander Salazar
