The present battle of Bitcoin miners, who are massively capitulating and shutting their holdings, is evident in the post-FOMC situation of the market. This trend may serve as market shock treatment, drawing attention to fundamental problems impeding Bitcoin’s comeback.
Bitcoin isn’t gaining any momentum at all, even when stocks are moving strongly. The main cause of the discrepancy is the BTC miners’ post-halving surrender, which is essentially limiting the price at this point. Massive sell-offs by Bitcoin miners are caused by rising operating costs and decreasing reward structures, which intensify negative pressure and prevent Bitcoin from keeping up with positive signals from the wider financial markets.
The fact that Flowbank, a bank with a tri-party arrangement with Binance, is currently facing bankruptcy procedures exacerbates the situation even further. In general, this event further confuses the dynamics of the Bitcoin market.
With less volatility and no obvious reason to move the market in any direction, we should expect a rather calm summer. The SEC’s Gary Gensler has hinted that a spot Ethereum ETF might be authorised by the end of the summer, but it wouldn’t immediately boost Bitcoin. The market is only waiting for big news or events to steer it; it is in a holding pattern.
This gives it a window of opportunity for traders of Ethereum, or ETH. With ETH volatility at a 10 vol premium to BTC and the spread probably narrowing as ETH overwriters return and wait for the approval of an ETH spot ETF, this calm summer might be an excellent time to engage in ETH accumulation trades and a calculated reallocation of risks to minimise issues during spikes in volatility.
