Bitcoin Price Analysis: Can BTC Reclaim $120,000 Or Is It A Bridge Too Far
Bitcoin (BTC) started a fresh increase on Wednesday, reclaiming $115,000 and settling at $115,051. The flagship cryptocurrency continued pushing higher on Thursday, rising over 2% to cross $117,000 and settle at $117,483. However, BTC is marginally down during the ongoing session, trading around $116,924.
BTC found support after a substantial decline on Tuesday thanks to a dovish Federal Reserve. Analysts believe the latest rally is driven by institutions that are leveraging market liquidity and liquidation effects to push BTC past $115,000.
Union Jack Oil Bets On Bitcoin (BTC)
Union Jack Oil, a publicly traded UK energy company, is eying Bitcoin to help unlock its West Newton field. The company is betting on converting gas into Bitcoin hashrate to generate cash flow from the field, which has around 200 billion cubic feet of untapped gas. The company has announced an agreement with field operator Rathlin Energy and Texas-based 360 Energy to explore Bitcoin mining at the West Newton gas field. The deal will see the mining companies deploy modular data centers. These data centers will use stranded gas from the field’s WNA-2 well. If the project is approved, it could be expanded across the field’s 200 billion cubic feet of reserves.
Union Jack Oil hopes the initiative can help break the field’s regulatory quagmire. The discovery was announced in 2019, but the field remains undeveloped due to the UK’s fragmented onshore planning network. David Bramhill, executive chairman of Union Jack Oil, outlined the company’s frustration, stating,
“Regulatory uncertainty has unduly hampered progress, and planning challenges have tarnished somewhat the perception of several commercially attractive onshore projects, such as West Newton.”
The partnership with 360 Energy could help monetize gas, which would otherwise remain stranded.
“The relationship with 360 Energy has the potential to enable the Joint Venture partners to realise significant returns from natural gas volumes via wells that would not otherwise contribute to either the early production scheme or the full field development.”
SBI Holdings Denies Filing For Bitcoin-XRP ETF
Japanese financial conglomerate SBI Holdings has denied reports that it had filed for Bitcoin (BTC) and Ripple (XRP) ETFs. Several media reports on Wednesday claimed SBI had filed an ETF application for two crypto investment products, a dual gold and crypto ETF and a dual BTC and XRP ETF. The reports cited SBI’s earnings report to back up their claims. However, an SBI representative stated,
“Contrary to some media reports, we have not filed any applications with the authority to form an ETF related to crypto assets. It is only at the planning stage.”
Japanese regulators are still debating the classification of crypto. Japan’s Financial Services Agency (FSA) proposed recognizing specific crypto assets and products as financial instruments under the Financial Instruments and Exchange Act (FIEA). The SBI representative stated,
“In Japan, ETFs that incorporate crypto assets are expected to be approved in a way that aligns with the responses of the financial authorities and tax authorities. Therefore, the filing will be done after these legal revisions have been made.”
Bitcoin (BTC) Could Be Heavily Undervalued: Capriole Investments
Charles Edwards, the founder of Capriole Investments, believes Bitcoin (BTC) is heavily undervalued and should trade as high as $167,800 per coin if its price matched its energy value. Charles calculated that Bitcoin’s true value is 45% higher than the current price levels. According to Edwards, Bitcoin’s fair value metric, created by Capriole Investments in 2019, states that Bitcoin’s fair value is a “function of energy input, supply growth rate, and a constant that represents the fiat dollar value of energy.
In simple terms, this means Bitcoin’s value should be zero if miners stopped participating in the network. However, current record hashrates show Bitcoin is anything but worthless. According to on-chain analytics platform Glassnode, the current hashrate stands at 1.031 zettahashes per second (ZH/s). Edwards stated,
“Hash Rates are flying, and Bitcoin Energy Value just hit $145K. That puts the price at a 31% discount on value. We are trading at a deeper discount to value today at $116K, than when Bitcoin was at $10K in September 2020.”
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) made a strong recovery after dropping to an intraday low of $112,707 on Tuesday. The flagship cryptocurrency reclaimed $115,000 on Wednesday and soared past $117,000 on Thursday, settling at $115,483 before dropping during the ongoing session. BTC’s strong recovery is likely due to the Federal Reserve and President Trump.
Federal Reserve governors struck a dovish tone, with Federal Reserve Bank of New York President John Williams opening the door for a rate cut in September. Mary Daly, President of the Federal Reserve Bank of San Francisco, and Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, cited the NFP report and revisions as a reason for interest rate cuts. President Trump’s executive order allowing Bitcoin and other alternative assets in retirement plans also boosted investor sentiment. Markets will now turn their attention to the US CPI report due next week. Lower-than-expected numbers could seal expectations for a rate cut in September, with Federal Reserve Chair Jerome Powell likely announcing it at the Jackson Hole Symposium. However, higher-than-expected numbers could see the Fed adopt a hawkish stance yet again.
BTC’s recovery was also driven by smart money, pushing prices up after weeks of sideways movement. Bitunix analysts explained that major funds are leveraging market liquidity and liquidation events to push BTC higher. This means institutional players are buying BTC when liquidity is low. Thanks to low liquidity, the purchases are having a substantial impact on prices, drawing in more traders.
“If $115k holds, smart money may guide the market to clear liquidity up to the $123k – $127k range. Continued ETF accumulation and expectations of macro monetary easing remain the broader backdrop for the bull market.”
BTC started the previous week in the red, dropping 1.11% to $118,069. It encountered volatility on Tuesday as buyers and sellers struggled to establish control. Sellers ultimately gained the upper hand as the price registered a marginal decline. BTC fell to an intraday low of $115,772 on Wednesday. It rebounded from this level to reclaim $117,000 and settle at $117,788, ultimately registering another marginal drop. Sellers retained control on Thursday as the price fell nearly 2% and settled at $1165,800. Selling pressure intensified on Friday as BTC plunged over 2%, slipping below $114,000 and settling at $113,365. The flagship cryptocurrency continued declining on Saturday, falling 0.67% to $112,601.
Source: TradingView
Despite the overwhelming selling pressure, BTC recovered on Sunday, rising 1.52% to cross $114,000 and settle at $114,311. Buyers retained control on Monday as the price rose 0.69% to cross $115,000 and settle at $115,097. Price action turned bearish on Tuesday as BTC plunged to an intraday low of $112,707. However, it rebounded from this level to settle at $114,135, ultimately registering a 0.84% drop. Buyers returned to the market on Wednesday as BTC rose 0.80% to reclaim $115,000 and settle at $115,051. Bullish sentiment intensified on Thursday as BTC rallied, rising over 2% to cross $117,000 and settle at $117,483. The current session sees BTC marginally down, trading around $116,629.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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