Crypto Keeps Climbing as Compromise Emerges for Infrastructure Bill
The London hard fork, which rolled out the EIP-1559 upgrade, was the inciting event that finally got the broad market out of its two-month-old trading range.
Bitcoin (BTC, Tech/Adoption Grade “A-”) has since jumped to over $45,000 and Ethereum (ETH, Tech/Adoption Grade “A”) to over $3,100. What makes these moves more impressive is they’re in spite of the looming threat from the unfavorable infrastructure bill that’s currently the hot topic on Capitol Hill.
The infrastructure bill has the potential to make or break this bullish momentum. Luckily, that major threat appears to have been avoided. For now, at least.
That’s because a compromise was reached earlier today between the Democrats, Republicans and the Treasury Department. The new language clarifies the exemption of crypto transaction validators and those who sell noncustodial crypto wallets from a broadened definition of “brokers.”
The amendment is still poorly worded, and even though the final draft isn’t what the crypto industry wanted, it’s still better than what was proposed by the “anti-crypto” lobby.
For now, the crypto markets reacted neutrally to the whole endeavor as it falls between the two previously discarded proposals, which were either bullish or extremely bearish. As to the long-term effects, we’ll just have to wait and see what happens should the bill pass tomorrow.
TradingView’s BTC/USDT five-minute chart shows a neutral reaction — usually indicating indecision — right after the new compromise amendment was suggested.
What’s curious is that despite the strong rally, old holders are not selling their crypto and taking profits.
This is apparent because we still haven’t seen a significant increase in old Bitcoins (held for longer than one year) being spent, according to GlassNode data. This is noticeably different from the 2018 bear market, where old holders were selling on most relief rallies.
This indicates that these long-term holders believe in further growth. We do, too.
Notable News, Notes and Tweets
- Coinbase Global, Inc. (Nasdaq: COIN) will enable crypto buys with linked debit cards to Apple Pay and Google Pay and allow instant cashouts of up to $100,000 per transaction.
- Don’t let new gas fees catch you off guard! Learn how to set the right gas fee in MetaMask wallet when using ETH or Ethereum-based tokens.
- The text of the new crypto agreement that will likely be voted on tomorrow.
- “It will never not be funny that cryptocurrency just held up a $1 trillion dollar infrastructure bill AND united two deeply divided political parties.”
What’s Next
Market sentiment shifted from “fear” to “greed” over the past week. So don’t be surprised if we see some smaller short-term corrections similar to the breather Bitcoin took before pushing past resistance at $42,000.
After all, we still haven’t seen the real testing of support levels in the broad market — something we usually expect in bull runs, as nothing goes up in a straight line. Still, if we are entering the parabolic phase, there’s a chance cryptos may skip this step altogether.
That’s why our crypto team is keeping a close eye on the markets and our Timing Model.
And it’s why you should keep checking in with our Weiss Crypto Alert issues.
Best,
Marija Matic
