Waiting for a Catalyst

Key Takeaways

• BTC price remains uninspired without a near term catalyst on the horizon
• Retail interest has dropped recently, based on ETF activity & Google Trends
• The SEC has swiftly ended many active regulatory suits against exchanges

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Digital Asset Commentary

Bitcoin price holds a low-volatility, bearish tilt, as near-term catalysts, such as the establishment of a US strategic Bitcoin reserve, have not yet materialized. Bitcoin reserve bills have been introduced in several states, with Utah progressing the furthest toward potentially enacting a bill. However, initiatives have already failed in four states: Montana, North Dakota, Pennsylvania, and Wyoming.

US BTC ETFs have also been net sellers over the past two weeks, offloading more than $1.1 billion. Meanwhile, Google Trends data for the search term "bitcoin," which serves as a rough gauge of retail investor interest, has fallen back to pre-election levels. Seasonally, pre-COVID and pre-spot ETFs, Q1 & Q3 were generally more bearish for BTC, while Q2 & Q4 tended to see stronger performance.

Thus far, Bitcoin has failed to break down below the multi-month range, with key support at the 20-week moving average, now at $90k. Altcoins, on the other hand, have fared worse, with Ethereum down 30% in a month and Solana down nearly 50% from January all-time highs.

On the regulatory front, the SEC has backed down from several previous lawsuits involving digital asset exchanges. Enforcement actions against Coinbase, Robinhood, and OpenSea have been dropped or dismissed, and a court appeal regarding crypto broker-dealer rules has been abandoned. These actions mark a shift from the Gensler SEC, suggesting improving relations between regulators and the digital asset industry.