Market Overview
The cryptocurrency market doesn’t seem to be in a hurry to recover. With a capitalization of around $3.3 trillion, the market is consolidating at a lower level. Before this, there was consolidation near $3.5 trillion, and just fifteen days ago, it was just below $3.8 trillion.
It appears that another round of sales followed the inauguration of Donald Trump, an event that had sparked optimism among cryptocurrency enthusiasts. By the end of the first week of February, the sentiment index returned to neutral territory.
Bitcoin is priced at $98,500, having lost more than 6% in the last seven days. Buyers have failed to organize a quick rebound after Monday’s collapse. Corporations and private speculators seem to be buying BTC during the dips, but it hasn’t been enough to reach historical highs. However, this has caused Bitcoin’s dominance to rise above 60%, the highest level since March 2021.
News Background
Cryptocurrency investors are frustrated with the lack of progress in creating a Bitcoin reserve in the U.S. The previous day, David Sachs, head of the Digital Asset Markets Working Group, stated that creating a Bitcoin reserve is a priority but did not provide further details.
Arthur Hayes, the former CEO of BitMEX, stated that the U.S., China, and other nations will soon be forced to print more money, which could drive Bitcoin to new record highs.
El Salvador has bought 20 more BTC in the last week, taking advantage of the price drop. On February 4th, the country purchased 11 BTC in one go, raising its national Bitcoin reserve to 6,067 BTC.
Semler Scientific has also continued to increase its Bitcoin reserve. In the last three weeks, it has bought 871 BTC, bringing its total to 3,192 BTC.
Ethereum’s issuance has risen to 120,521,725 ETH, levels not seen since September 2022, before the Merge upgrade. The increase in supply casts doubt on Ethereum’s narrative as a deflationary asset.
Additionally, a bill has been introduced in the U.S. Senate to regulate stablecoins, which could boost demand for U.S. Treasury bonds and encourage financial innovation.
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