(Kitco News) – The ‘Trump bump’ was in full effect for the cryptocurrency market on Friday as speculation around the presidential candidate proposing Bitcoin (BTC) as a strategic reserve asset at the Bitcoin 2024 conference on Saturday helped the top crypto erase the losses from earlier in the week to climb back above $67,000.
Stocks also rallied higher, boosted by the June core Personal Consumption Expenditures (PCE) index report. Although the measure came in higher than expected, rising 2.6% year-over-year in June versus economist estimates of a 2.5% increase, it was unchanged from May’s reading and marked the slowest annual increase for core PCE in more than three years.
Core PCE rose 0.2 % from the prior month, in line with Wall Street's expectations and faster than the 0.1% increase seen in May.
Investors took the report as a sign of the Federal Reserve’s continued progress on bringing inflation towards their 2% target, boosting hopes that a rate cut could come in September. The CME FedWatch Tool shows Wall Street now puts the odds of a September rate cut at 100%.
At the closing bell, the S&P, Dow, and Nasdaq all finished the week in the green, up 1.11%, 1.64%, and 1.03%, respectively. Gold gained 1.33% to trade at $2,384.90, and silver climbed 0.30% to $28.06.
Data provided by TradingView shows that Bitcoin bulls started to rally near midday on Thursday, pushing the top crypto to $65,775 by early Friday, and then extending the gains to $68,000 on Friday afternoon, where they ran into stiff resistance from bears.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $67,550, an increase of 4.1% on the 24-hour chart.
Volatile markets
“Bitcoin’s latest price movement is keeping traders on their toes,” said market analyst Bloodgood in his latest market update. “Bulls have been euphoric for two weeks as they have seen BTC rise over 25% and knock on the doors of a key weekly level at $69k.”
“This week was less fun for bulls and more fun for those that shorted the previous all-time high level as we have seen a drop back down to the daily level at $64.5k,” Bloodgood noted. “On the daily timeframe, we can see that BTC was scooped up pretty quickly below the mentioned daily level, and at the time of writing, we are back on track towards the previous ATH.”
“What we don’t want to see at this point is that the current weekly candle remains in this formation (bearish hammer) as the outcome won’t be so pleasant for bulls but could give a good short signal,” he said.
While cryptos appear to be regaining their mojo, Bloodgood observed that it has been a “Terrible two weeks for stocks.”
“The S&P 500 has broken its ‘staircase’ pattern, and we are looking at two huge red weekly candles,” he noted. “The question is, will it repeat the price action from April and continue after the breakout level is tested or are we going lower? It’s hard to bet on either at this point due to the upcoming elections and the Fed being unpredictable.”
After noting the Tuesday launch of eight Ethereum (ETH) exchange-traded funds (ETFs), which dominated news headlines for several cycles, Bloodgood said, “With all the attention on ETH, it’s worth mentioning that the Bitcoin ETFs have been buying the dip once again.”
“Even though price action hasn’t been ideal this week, the net flows have been $483.5 million so far,” he said. “As for the Ether ETF launches, anyone who’s been around in January will remember that a spot ETF doesn’t mean that the asset will go up in a straight line. BTC had a 20%+ dip after the ETFs launched, before proceeding to almost double in price after the shakeout. I won’t be surprised if we see something similar play out now.”
“In any case, the Ether ETFs are an incredible tailwind for [altcoins], regardless of any short-term volatility,” Bloodgood said. “The prospect of other ETFs is now on the table (Solana being the obvious first candidate), and the legitimacy and capital that will be brought into the altcoin market will lead to some incredible opportunities across the board. I don’t think we’ll have an altseason where everything pumps simultaneously, but if you pick your bags right, there will be plenty of money to be made.”
According to market analyst Mister Crypto, the Bitcoin hash ribbons chart just flashed a buy signal that has historically preceded a parabolic move higher.
The #Bitcoin hash ribbons are finally flashing a buy signal again.
Every time this has happened after a $BTC halving...
The parabolic move has been initiated.
This time won't be different. pic.twitter.com/k483PNH6mc— Mister Crypto (@misterrcrypto) July 26, 2024
And crypto investor Elija Boom offered a different view of the same development, comparing the current state of the market to similar periods in 2016 and 2020.
Imagine selling now ?♂$BTC pic.twitter.com/I7F9nGkGk3
— Elja (@Eljaboom) July 26, 2024
Reversal of fortunes for altcoins
Friday presented altcoins with the opposite experience they saw on Thursday when only one token recorded a notable gain, as only one token saw a notable decline to end the work week.
Daily cryptocurrency market performance. Source: Coin360
Galxe (GAL) which gained 15.4% on Thursday, fell 14.5% on Friday to trade at $3.24. Leading the gainers was Conflux (CFX) with an increase of 20.3%, followed by a 19% gain for Popcat (POPCAT), and an 18.3% spike for Space ID (ID).
The overall cryptocurrency market cap now stands at $2.42 trillion, an increase of 4.9 over the past 24 hours, and Bitcoin’s dominance rate is 55.4%.
