Bitcoin price steady above $65,000 as Hermetica launches BTC-backed USDH on layer 1

US spot Bitcoin ETFs records inflows totaling $422.50 million on Tuesday, the largest since June 6.
As reported by Tree News, Kraken notified Mt. Gox creditors that it had received its share of the funds.
On-chain data MVRV Z-Score shows that BTC is undervalued, suggesting a bullish move ahead.
Hermetica, a Bitcoin DeFi protocol, launched its BTC-backed USDH on Bitcoin's L1 using the Runes protocol.

Bitcoin (BTC) trades slightly up at the time of writing on Wednesday, rising by 0.14% at $65,158 after closing above the daily resistance level of $64,913 the day before. On-chain data indicates that BTC is undervalued, and US spot Bitcoin ETFs recorded inflows totaling $422.50 million on Tuesday. According to Tree News, Kraken notified Mt. Gox creditors that it had received its share of the funds, while Hermetica, a Bitcoin DeFi protocol, launched its BTC-backed USDH on Bitcoin's L1 using the Runes protocol.

Daily digest market movers: Bitcoin price holds the $65,000 level as US Spot ETFs recorded a $422.50 million inflow

According to Arkham Intelligence, Mt. Gox likely transferred 48,641 BTC, equivalent to $3.10 billion, to Kraken Exchange, prompting a minor bearish response in the market and resulting in a slight decline in cryptocurrency prices. Subsequently, Kraken notified Mt. Gox creditors that it had received its share of the Mt. Gox funds, as reported by Tree News. As of this morning, the remaining BTC transferred amounts to 43,114 BTC, valued at $2.74 billion, which is still under the control of the Mt. Gox trustee.

UPDATE ON MT GOX MOVEMENTS

We believe that 3JQieEzccKjFS34oW8KZSGBDndiH1YyFrE is most likely associated with Kraken, one of the exchanges involved in repaying Mt. Gox creditors.

This address received 48,641 BTC ($3.10B) from Mt. Gox this morning, which remains unspent.

The… https://t.co/FfFQcI9Xvr pic.twitter.com/4T3tuC3CSM
— Arkham (@ArkhamIntel) July 16, 2024

According to Coinglass Bitcoin Spot ETF data, Tuesday saw inflows totaling $422.50 million, with Blackrock's ETF (IBIT) adding 4,020 BTC valued at $260.20 million. This marks the second day in a row of inflows this week and the largest since June 6. Monitoring these ETFs' net inflow data is crucial for understanding market dynamics and investor sentiment. The combined Bitcoin reserves held by the 11 US spot Bitcoin ETFs stand at $52.39 billion.

Bitcoin Spot ETF Net Inflow (USD) chart

Hermetica, a Bitcoin-based decentralized finance (DeFi) protocol, has introduced its BTC-backed synthetic dollar, USDH, on Bitcoin's layer one (L1) using the Runes protocol. The initiative includes future scaling efforts through layer two (L2) solutions like Stacks to enhance Bitcoin-native DeFi operations. This development offers Bitcoin users alternatives that reduce reliance on centralized exchanges and fiat-backed stablecoins across other blockchain networks.

Hermetica x @LiquidiumFi $USDh is now live on Liquidium.

Borrow $BTC against USDh collateral, earn Hermetica & Liquidium points. pic.twitter.com/HfAxhjgzAU
— Hermetica (@HermeticaFi) July 17, 2024

According to CryptoQuant, the Market Value to Realized Value (MVRV) Z-Score provides insights into whether the market is overvalued or undervalued. Historically, MVRV Z-Score around -0.5 has often resulted in significant returns, with the metric peaking at 0.8. When combined with the 365-day Simple Moving Average (SMA), the MVRV Z-Score acts as both support and resistance.
Currently, the MVRV Z-Score stands at 0.05, finding support from the 365-day SMA indicator. This suggests a potential market bottom and continuation of the bullish trend. This upward movement could persist until it reaches overbought territory, potentially reaching the cyclical peak in the red zone.

Bitcoin MVRV Ration Z-score chart

Technical analysis: BTC price looks promising

Bitcoin price surged above a descending trendline on Sunday, marking a 7% rally over the following two days and achieving a close above the daily resistance level of $64,913 by Tuesday. At the time of writing on Wednesday, BTC is trading slightly up by 0.14% at $65,158. Such a strong upward momentum often precedes a retracement, presenting a potential buying opportunity for investors on the sidelines.

Sideline buyers seeking opportunities can consider positions between $59,200 and $57,800, where the previously broken trendline resistance now serves as support. However, should BTC sustain its bullish momentum, it may advance by 3% from its current trading price of $65,158 to test the weekly resistance of around $67,209.

On the daily chart, the Relative Strength Index (RSI) is currently above the neutral level of 50, and the Awesome Oscillator (A.O.) has also flipped above its neutral level of zero. These momentum indicators strongly indicate bullish dominance.

Furthermore, surpassing the $67,209 level could allow an additional 7% rise to retest its daily high of $71,997 from June 7.

BTC/USDT daily chart

Conversely, if BTC closes below $56,405 and forms a lower low in the daily timeframe, it may signal persistent bearish sentiment. This scenario could trigger a 7.5% decline in Bitcoin's price, targeting its daily support at $52,266.

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.