Bitcoin rebounded to around $ 32,200 after hitting a 2.5-week low near $ 31,000 early Friday.

The largest cryptocurrency by market value could have been carried by a CoinDesk report that Bank of America approved Bitcoin futures trading for some clients, according to Edward Moya, senior market analyst at Oanda.

“This is a huge commitment for America’s second largest bank and signals that interest in trading cryptocurrencies remains,” Moya wrote in an email. “If one Wall Street bank sees an opportunity in doing something risky, the rest will easily justify following suit.”

Current prices

  • Bitcoin (BTC): $ 31,964.2, + 1.04%
  • Ether (ETH): $ 1,917.5, -0.29%
  • S&P 500: 4327.1, -0.75%
  • Gold: $ 1,810.9, -1.01%
  • 10-year government bond yield closed at 1.299% compared to 1.303% on Thursday

Analysts said Bitcoin could prepare for a price breakout – higher or lower – after trading in a range between around $ 30,000 and $ 40,000 for the past eight weeks.

The big concern is that falling below the $ 30,000 psychological level could trigger additional sales as options traders look for square positions.

“There is a big step ahead,” wrote blockchain analyst William Clemente III in Anthony Pompliano’s newsletter on Friday. In theory, we could look at this big step in the next few days, but it could take up to this full three weeks. “

According to Mati Greenspan, founder of cryptocurrency and currency analysis firm Quantum Economics, the breakout appears to be more on the downside based on the look of the Bitcoin price chart.

“Bitcoin’s chart looks really ugly right now,” Greenspan wrote in his newsletter. “The downtrend that has emerged over the past few days suggests that gravitational forces require the red line to be retested at $ 20,000, the previous all-time high. In technical language, this is called surrender. “

District and crypto investors

Earlier this month, Circle, the company behind the fast-growing dollar-pegged stablecoin USDC, announced that it would become a public company valued at $ 4.5 billion through a deal with a special purpose vehicle (SPAC).

Charlie Morris, founder of ByteTree Asset Management, speculated this week that the deal could end up attracting more investors to cryptocurrencies.

It is “undoubtedly the starting stock for the cautious,” wrote Morris in his weekly newsletter on July 14.

Large investors would find it difficult to resist the stock due to the rapid growth of the USDC: the stablecoin supply rose from around $ 3.9 billion at the beginning of the year to more than $ 25 billion. “It is clear this company is growing like weeds,” wrote Morris.

What might make the new stocks more attractive to portfolios is that USDC “powers crypto but doesn’t have any of the volatility, making it a natural haven compared to the money managers or miners whose assets are tied to crypto prices,” said Morris .

But that could just be a camel’s nose under the tent:

“The old world will still own all these stocks in the end, and that’s why index funds always amuse me. They just buy everything in front of them, which means that investors who make an effort to avoid crypto will end up owning it. Before long, everyone will be investing in crypto and crypto stocks, whether they like it or not, and Circle’s listing will be a crowd-pleaser. “

The outstanding amount of dollar stablecoin USDC has soared to more than $ 25 billion this year.

Source: Coin Metrics, CryptoCompare, CoinGecko

What about the leash?

Stablecoin’s Giant Tether (USDT) parabolic market capitalization growth suddenly stalled in late May as Bitcoin price hit its all-time highs.

According to analysts and market participants speaking to CoinDesk’s Muyao Shen, the sudden pause shows that the dominance of the world’s most traded cryptocurrency is threatened by three unprecedented challenges that combine in a perfect storm to shake the stablecoin.

  • China’s crackdown on cryptocurrencies and money laundering has stifled the fiat ramp to crypto markets through over-the-counter brokers, while listless Bitcoin prices have reduced the incentive to invest: “Tether’s market in Asia is mainly via OTC traders and with less money flowing into the market, there is less demand for tether, “Rachel Lin, former vice president and founding partner of Singapore-based crypto investment firm Matrixport, told Shen.
  • The rising star of the stablecoin market is increasingly USDC. “I think USDC has a chance to compete against Tether in the stablecoin market in Asia,” said Justin Sun, who runs the Tron blockchain.
  • More recently, regulators and governments around the world have been asking more questions about USDT and other stablecoins. “The market is steeped in bearish sentiment and traders are looking for a reason,” said Noelle Acheson, head of market insights at crypto prime broker Genesis Global Trading, a sister company of CoinDesk. “It’s FUD (Fear, Uncertainty, and Doubt) season, and Tether’s vulnerabilities are almost always part of that conversation.”

While a Tether executive admitted that the demand for USDT has fallen, she argued that the trend is not limited to the token alone.

“Demand for Tether is rising and flowing and has been impacted by lower demand in recent weeks,” said Paolo Ardoino, Tether’s chief technology officer, in a written response via a spokesman.

USDT market capitalization vs. Bitcoin price

Source: Glassnode

Altcoin summary

  • Thorchain loses in the attack 4K in Ether: Thorchain suffered an attack on the crypto trading protocol that stripped about 4,000 ETH, valued at about $ 7.7 million, based on the price of Ether at press time. The company tweeted that it would provide “more detailed assessment and recovery steps” shortly. Administrators previously wrote that the network was halted while the developers investigated the extent of the violation. “While the treasury has the means to cover the stolen amount, we ask the attacker to contact the team to discuss the return of the funds and a bounty commensurate with the discovery,” the administrators wrote on Telegram .
  • Binance is discontinuing support for share tokens: The crypto exchange Binance said it would no longer support share-linked tokens barely three months after making them available on its trading platform. Binance announced on Friday that stock tokens will no longer be available for purchase on their website with immediate effect and support for such tokens will end on October 14, with all positions being closed on the following day. The competitive exchange, which has faced regulatory headwinds, said the move will allow it to focus on other products.
  • Rally of FOX tokens: After ShapeShift announced it would transform into a Decentralized Autonomous Organization (DAO), its governance FOX token rose 300% to $ 1.16 in a matter of hours. While the cryptocurrency has fallen to $ 0.55 in the past 24 hours, it is still up nearly 200% this week – an excellent performance given the general slump in the market. Analysts disagree on whether the rally represents an increasingly intense search for returns or whether investors are cheering the early mover advantage of ShapeShift as a DAO.

Relevant news

Other markets

Most of the digital assets on CoinDesk 20 ended lower on Friday.

Notable Winners as of 9:00 PM UTC (4:00 PM ET):

Longing Financing (YFI) -5.26%