As concerns over data privacy regulations grow, Bitcoin has surged past the $110,000 mark for the second day in a row, fueled by a resurgence in altcoin markets. Rising by slightly over 1% in the past 24 hours, Bitcoin is trading just above $110,000, reflecting the broader crypto market’s bounce-back. The CoinDesk 20 index, which tracks the top 20 cryptocurrencies excluding stablecoins, exchange coins, and memecoins, surged by 3.3%, driven in part by substantial gains in Ethereum (ETH), Solana (SOL), and Chainlink (LINK), each achieving growth between 5% and 7%.
Impact of Data Privacy Regulations
UniSwap (UNI) and Aave (AAVE) were the clear winners, with UNI soaring 24% and AAVE climbing 13%. This rally was inspired by positive remarks from SEC Chair Paul Atkins about the future of decentralized finance (DeFi). Meanwhile, the crypto market remains on high alert regarding data privacy regulations, as investors anticipate further impacts.
While the equity markets stayed mostly flat, crypto stocks showed little movement except for Semler Scientific (SMLR). The company’s stocks suffered a 10% drop, now valued less than its Bitcoin holdings on its balance sheet. In contrast, sentiments in the crypto market remain cautious, despite good gains.
Research from K33 shows that funding rates and leverage measures are indicative of cautious market sentiment, even though Bitcoin trades near previous highs. Binance’s Bitcoin perpetual swaps saw negative funding rates multiple times last week, with the average annualized rate at just 1.3%, typically a sign of market bottoms instead of tops.
Flows into leveraged Bitcoin ETFs are also subdued. The ProShares 2x Bitcoin ETF (BITX) reflects this, holding 52,435 BTC compared to its December 2023 peak of 76,755 BTC. Such conservative positioning could set the stage for a “healthy rally” in Bitcoin, according to market watchers.
However, not everyone is sold on the sustainability of the current market trends. “Is this a true breakout that will continue? Probably not,” explains Kirill Kretov, senior automation expert at CoinPanel. He suggests this is part of a typical volatility cycle, likely to result in a sharp drop from any negative news or narrative change.
Kretov believes the current environment rewards traders who can manage volatility. Technically, he notes, Bitcoin’s crucial support levels lie at $105,000 and $100,000, areas that might come under pressure if selling picks up.
At Bakara Invest, our analysis suggests that data privacy regulations could further integrate cryptocurrency into mainstream financial systems, giving it resilience against broader market shifts.
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