Traditional Finance Giants Embrace Bitcoin

Bitcoin, the pioneering cryptocurrency, has once again surged above $30,000, igniting bullish sentiment in the market. As traditional finance (TradFi) players venture deeper into crypto, this latest price movement marks a significant development. With Bitcoin up more than 10% in the past 24 hours, we wonder if a bull rally is on the horizon. 

Several renowned TradFi giants have recently taken notable steps to establish their presence in the crypto space. For instance, BlackRock, Invesco, and WisdomTree have filed applications for spot Bitcoin exchange-traded funds (ETFs) within six days, highlighting their interest and confidence in digital assets.

With their substantial resources and influence, institutional players like BlackRock, with $9 trillion in assets under management, have the potential to inject significant capital into cryptocurrencies, boosting market liquidity and stability.

Furthermore, regulatory clarity and compliance have become key factors in attracting traditional financial institutions to crypto. As evidenced by Mastercard's trademark application for crypto and blockchain software development and Deutsche Bank's regulatory license application for a crypto custody service on June 20, companies are actively seeking regulatory frameworks to ensure compliance and instill confidence among investors.

The mainstream recognition and acceptance of cryptocurrencies have also contributed to TradFi's growing dominance. Citadel, Fidelity, and Charles Schwab's launch of the EDX Markets crypto exchange platform on June 20 demonstrate the increasing integration of digital assets into traditional financial products and services.

As TradFi's influence continues to grow, it holds the potential to shape the trajectory of the upcoming Bitcoin bull rally and the overall cryptocurrency market. Additionally, the regulatory authority is offering some clues besides the TradFi push. 

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FED Chair Confident About Crypto

During a semi-annual hearing on monetary policy, Federal Reserve Chair Jerome Powell expressed confidence in the staying power of cryptocurrencies as an asset class. While the primary focus of the hearing was the recent pause on interest rate hikes by the Federal Reserve, the discussion swiftly shifted toward digital assets. Testifying before the House Financial Services Committee, Powell acknowledged that crypto appears to have established itself as a durable asset class.

These remarks from the FED Chair align with his earlier statements during the same testimony, where he expressed his perspective on stablecoins as a form of money. Powell's recognition of the legitimacy and potential of digital assets adds weight to the notion that cryptocurrencies, such as Bitcoin, are gaining credibility and acceptance from traditional financial institutions.

In addition to Powell's remarks, a U.S. congressional committee is currently drafting new rules for digital assets and plans to debate and likely advance two proposed laws in the second week of July. The legislation aims to create a distinct pathway for digital assets to transition from security investments to commodities, reducing reporting and regulatory requirements.

House Financial Services Committee Chair Patrick McHenry and Rep. Glenn 'GT' Thompson drafted the legislation, which will require support from Democrats in the Senate and President Joe Biden's signature to become law.

These developments on the regulatory front, combined with Powell's positive stance, signal a potential shift in the broader perception and acceptance of cryptocurrencies. However, given all these factors, are we in for a massive Bitcoin rally?

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Experts on Any Potential Bitcoin Rally

The recent surge in Bitcoin's price has captured the attention of experts, leading many to believe that a new bull run is just beginning, attracting the interest of institutional investors eager to capitalize on the trend. Crypto trader Moustache recently stated that Bitcoin is about to experience its first golden cross of the Moving Average (MA) 20/200, a never-before-seen event.  

A golden cross indicates bullish market trends when the 50-day moving average (MA50) exceeds the 200-day moving average (MA200).  Moustache's prediction carries weight because it suggests that Bitcoin is on the brink of entering an uncharted bullish trend. 

Further, Crypto analyst Rekt Capital has observed the current state of Bitcoin's price action, noting that while the cryptocurrency has broken out of its multi-month downtrend, the sustainability of this momentum remains uncertain.

Based on the blue lower high diagonal line seen on the chart, Rekt Capital highlights the difficulty of finding confirmation of a daily breakout for Bitcoin. There have been several failed retests of bitcoin after the breakout on the daily timeframe.

According to Rekt Capital, even though the recent breakout is undoubtedly positive for cryptocurrency, there is still significant resistance to overcome before the breakout can be fully confirmed. A weekly close above the downtrend would confirm the breakout, indicating that the bullish momentum is likely to continue.

Moreover, Aurelie Barthere, Nansen's principal research analyst, highlights in a June 20 report that cryptocurrency selloffs are becoming shallower, as demonstrated by the relatively muted price reaction of Bitcoin and Ethereum following the SEC's legal battles against Binance.US and Coinbase.

Barthere argues that more regulatory clarity and a clearer path toward lower inflation are essential for crypto prices to rise. If these factors are absent, the low-volatility range-bound price action may remain in place for longer.