- Bitcoin users started to suffer from FOMO after rumors surged about Amazon becoming interested in cryptocurrencies.
- The price of Bitcoin increased by 15% in a matter of hours, indicating a “short-squeeze.”
- Elon Musk has proven Bitcoin holds value despite his previous Twitter and media antics
Bitcoin has rallied towards the $40,000 level after more than six weeks of trading between two price poles. In addition, cryptocurrency sentiment briefly improved as it reached 32 out of 100 on the Fear and Greed Index, while the idea of FOMO (fear of missing out) is starting to circulate among retail investors as Bitcoin posted a 15% price increase. Still, Bitcoin’s price hasn’t been heavily impacted since it digressed due to China’s crackdown on cryptocurrencies and mining.
Every Piece Of News Helps
Bitcoin volatility is not conditioned by “US macroeconomic news“; yet, as per an American Institute for Economic Research study, scalability news matches Bitcoin’s price movement. Thus, the cryptocurrency market is a slave to its own influence. As Nikolaos A. Kyriazis argued, negative information towards Bitcoin has a higher impact on the price of Bitcoin rather than any optimistic news.
While both negative and positive news impact Bitcoin unevenly, current cases indicate the magnitude of the news influences Bitcoin. Amazon’s bid to increase exposure towards cryptocurrencies through their “digital assets” job posting briefly stimulated investors’ interests. However, the already debunked rumor that Amazon will start accepting Bitcoin and other cryptocurrencies, along with an affirmation that Amazon will start developing their digital currency, was the primary catalyst for bullish news.
As Crypto Banter highlighted, the rumor has more profound implications as Amazon continues to flout global payment providers such as Visa or Mastercard. Truly, Amazon’s take on cryptocurrencies would fully leverage their use cases by cutting out the middleman. In doing so, Amazon would increase its profit margins. However, a spokesperson for Amazon quashed any market rumors claiming “the speculation that has ensued around our specific plans for cryptocurrencies is not true.”
Elon Musk Boosts Positive Momentum
Elon Musk’s influence on the crypto market earned him the “most hated” person in the crypto “prize.” Yet, his latest incursions and discussions about Bitcoin helped boost positive momentum for the currency. During his appearance at the B-Word conference, Musk highlighted that he, Tesla, and SpaceX own Bitcoin and that Tesla will resume accepting it once mining becomes more reliant on greener energy.
Furthermore, Tesla’s $1.5 billion bitcoin purchase from Q1 is still intact on the company’s balance sheets. Therefore, their Q2 earnings indicate they incurred a $23 million impairment due to Bitcoin’s price. Still, as the report suggests, Tesla’s income quadrupled whilst in Q1 and they flipped some of their Bitcoin when the price surged.
On The Flipside
- The current price action of Bitcoin bears a resemblance to the previous bull run cycle, which could help predict the price in the coming weeks.
- Bitcoin failed to hold the above $40,000 mark, denoting it was just a longer short hunt.
- Crypto investment outflows continue to surge as investors removed $28 million, with Bitcoin amounting to a total of $24 million in outflows.
Tether The Shorts
The cumulative news regarding cryptocurrencies pushed Bitcoin above the previous resistance level. Jim Cramer, a CNBC analyst, indicated Bitcoin “feels short-Squeeze-ish” as the news around Tether and Amazon surged. Additionally, Glassnode confirmed the short reports as the extent of the jump was credited to over-leveraged positions.
Furthermore, Bloomberg reported Tether could face formal charges over bank fraud which gave Bitcoin market confidence as it contradicts the standards of USDT. Still, Humphrey Yang emphasized Bitcoin remains a volatile asset and, despite the current surge, investors should not change their strategy after a sudden price increase.