Bitcoin Breaks Critical $51k Resistance

GB Market Commentary 06/09/2021

by Marcus Sotiriou

Bitcoin finally broke above the $50,500/51,000 level after weeks of consolidation. Although the volume on this breakout is small, there is little resistance until $55,000, which many analysts are targeting next. Coinciding with the bullish technicals, on-chain metrics are showing strong accumulation, as Bitcoin balance on exchanges is at a 2021 low (shown below).

Furthermore, Bitcoin whales have added over 40,000 BTC in the last two weeks, making it hard to believe the rally ends anytime soon. Mike Alfred, who is the CEO of Digital Asset Data and well connected in the cryptocurrency industry, claims many large and important institutions that bought Bitcoin over the summer will be announcing their buys between September 7th and November 19th.

Tomorrow is historic as it is the day that El Salvador will make Bitcoin legal tender. Meaning it will be used an official currency alongside the US dollar. There has been some backlash from citizens about concerns with the volatility of the asset, but overall there is a positive sentiment. If the experiment proves to be a success this will be an incredible step for the mass adoption, as many other countries may follow.

Ethereum is flirting with the $4,000 level as it continues to perform well since the EIP-1559 upgrade. The main aspect of EIP-1559 being introduced to Ethereum was reducing the rate at which supply enters the market. On Saturday, there were more ETH burned than minted for the first time. This deflationary feature brings greater appeal to the ETH asset. Ethereum gas fees are rocketing at the moment though and hitting new highs, so its dominance in the altcoin space may not last in the long term due to its scalability issues.

The SEC continue their crackdown on the cryptocurrency industry, as they investigate the biggest decentralised exchange Uniswap. Enforcement attorneys are looking for more information on how investors use Uniswap and the way it is marketed. This comes after the SEC signed a deal last week with blockchain analytics firm Anchain.AI in order to analyse and trace DeFi transactions.