Bitcoin Near $ 60K As Coinbase Listing Stirs New Crypto Hype

Bitcoin Near $ 60K As Coinbase Listing Stirs New Crypto Hype

Bitcoin surged early Monday to a four-week high of $61,219.72. Analysts said the largest cryptocurrency might have gotten a boost from the hoopla surrounding U.S. exchange giant Coinbase’s coming direct stock listing Wednesday. BTC trades between its 10-hour and 50-hour averages on the hourly chart, a sideways signal for market technicians.

In cryptocurrency circles, the “Coinbase effect” is when a digital token gets a price pump after getting listed on the cryptocurrency exchange. But bitcoin might get the benefit of a different type of “Coinbase effect” – if newbie investors, spurred by mainstream press coverage of the stock listing, decide to put money into cryptocurrencies.  QCP noted that bitcoin prices, despite doubling so far this year, have underperformed the Standard & Poor’s 500 Index of large U.S. stocks in the past month, so a successful Coinbase listing might lead to a reversal.

The cryptocurrency analysis and data site IntoTheBlock wrote in a newsletter last week that “anticipation” of the Coinbase stock listing “has contributed to broader risk-on sentiment throughout crypto.” A week ago, the market value of all cryptocurrencies surpassed $2 trillion for the first time.  Cryptocurrency analysts also are studying a key blockchain data metric that’s seen as bullish: bitcoin’s liquid supply changes.

Related: Bitcoin Breaks to All-Time High, Ending Three Months of Consolidation “The Coinbase hype within crypto, in terms of valuation and its domino effect on other markets” means Wednesday’s direct listing might become “a key catalyst event,” Singapore-based crypto quant firm QCP Capital wrote Monday on its Telegram channel.

According to the analyst Willy Woo, more bitcoins are turning from liquid status to illiquid, meaning they’re getting withdrawn and locked away into long-term holding patterns. Story continues

On the other hand, CoinDesk reported that net inflows to digital asset investment products declined last week by $23 million to $83 million.  That means there might be less supply to go around for new bitcoin buyers, potentially offsetting what appears to have been a recent slackening of demand. Related: What Would Biden’s Tax Hikes Mean for Bitcoin?

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