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Crypto Mining and the BTC-Spot ETF Market

Anti-Crypto Rhetoric Remains a Crypto Market Headwind In recent sessions, […]

Anti-Crypto Rhetoric Remains a Crypto Market Headwind

In recent sessions, the spotlight returned to crypto mining. The US Energy Information Administration (EIA) issued a press release on January 31, focusing on crypto mining.

Notably, the EIA will begin surveying identified crypto miners this week. The EIA will require crypto miners to provide details on their energy use. EIA Administrator Joe DeCarolis said,

“We intend to continue to analyze and write about the energy implications of cryptocurrency mining activities in the United States. We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand.”

The day after the press release, Senator Elizabeth Warren targeted crypto mining, saying,

“For years, I’ve been ringing the alarm that crypto mining uses more energy than entire cities. Secretary Granholm’s decision to track crypto emissions is powerfully important in our fight to rein in crypto’s carbon pollution.”

The renewed focus on crypto mining could contribute to the broader anti-crypto movement on Capitol Hill. A renewed focus on crypto mining could adversely impact the US digital asset space.

Senator Warren continues pushing lawmakers to support the Digital Asset Anti-Money Laundering Act. The bill proposes to introduce banking-style anti-money laundering (AML) and countering the financing of terrorism (CFT) frameworks to the US digital asset space.

However, the US crypto market regulatory framework could hinge on the US Presidential Election.

Senator Cynthia Lummis recently discussed the Responsible Financial Innovation Act. Senator Lummis believes the bill would address the issues that resulted in the collapse of FTX and others, protect retail investors, and give the crypto market rules of the road.

While anti-crypto rhetoric remains a headwind, the BTC-spot ETF market is a focal point.

BTC-Spot ETF Market: Day 17 (February 5) to Set the Tone for the Week

BTC fell by 0.91% on Sunday. Following a 0.35% loss on Saturday, BTC ended the session at $42,623. Notably, BTC ended the week up 1.33% despite the weekend losses.

On Friday (Day 16 of trading), the BTC-spot ETF market recorded net inflows for a sixth consecutive session. However, net inflows declined in the latter part of the week despite a downward trend in Grayscale Bitcoin Trust (GBTC) outflows.

A continued downward trend in GBTC outflows and a pickup in BTC-spot ETF market net inflows could drive buyer demand for BTC.

BitMEX Research Flows – BTC Spot ETF Flows 040224

ETF Institute co-founder Nate Geraci shared a snapshot of the BTC-spot ETF market, saying,

“Clear two horse race among 9 new spot bitcoin ETFs… Blackrock & Fidelity. That said, strong middle class developing in this category. ARK and Bitwise on path to hit $1 bil in not too distant future. Invesco now over $300 mil. Both Valkyrie & VanEck $100+ mil.”

Discussing the latest BTC pullback to sub-$43,000, Geraci said,

“Why has bitcoin price not gone up since ETFs launched? Because more people are selling vs buying bitcoin. ETFs a small part of the overall market.”

The market dynamics could shift in the coming months. On Saturday, Geraci noted that three of the top 5 ETF issuers have opted to sit out the BTC-spot ETF race. Vanguard, State Street, and Charles Schwab represent almost 50% of the industry market share.

Technical Analysis

Bitcoin Analysis

BTC remained above the 50-day and 200-day EMAs, sending bullish price signals.

A BTC move through the $42,968 resistance level would give the bulls a run at the $44,690 resistance level.

On Monday, US lawmaker chatter, SEC activity, and BTC-spot ETF market updates warrant investor attention.

However, a break below the 50-day EMA would support a fall toward the $39,861 support level.

The 14-Daily RSI reading, 48.82, indicates a BTC drop to the $39,861 support level before entering oversold territory.

BTCUSD 050224 Daily Chart

Ethereum Analysis

ETH hovered below the 50-day EMA while remaining above the 200-day EMA. The EMAs send bearish signals for the short term but bullish signals for the longer term.

An ETH move through the $2,300 resistance level and the 50-day EMA would bring the $2,457 resistance level into play. Selling pressure may intensify at the $2,300 resistance level. The 50-day EMA is confluent with the $2,300 resistance level.

Investors must monitor ETH-spot ETF-related chatter.

However, an ETH fall through the $2,250 handle would give the bears a run at the $2,143 support level.

The 14-period Daily RSI at 44.17 suggests an ETH fall to the $2,143 support level before entering oversold territory.

ETHUSD 050224 Daily Chart


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