- Trump’s 401(ok) crypto transfer may gasoline extra demand for BTC than ETFs.
- Glassnode projected the asset might eye $120K as profit-taking actions remained subdued.
The Trump administration has relaxed a Biden-era steerage that barred retirement plans, 401(ok), from investing in Bitcoin [BTC] and different cryptocurrencies.
In a statement on the twenty eighth of Might, the Division of Labor rescinded the 2022 directive that warned of ‘excessive care’ earlier than together with crypto into 401(ok) funding plans.
Nonetheless, the company clarified that the U-turn doesn’t imply an endorsement of digital belongings however a impartial stance.
New demand for BTC?
Most ETF analysts and asset managers seen the replace as a brand new huge demand angle for BTC. Bitwise Europe head of analysis, Angre Dragosch, said,
“This was by far the larger information right this moment. Roughly $8.9 trillion are managed in 401k plans within the US. Bitcoin demand shock incoming.”
For his half, Ryan Rasmussen, one other Bitwise high analyst, noted {that a} 1% demand from 401ks may outpace ETF inflows.
“If simply 1% of the $8 trillion in 401k funds flows into Bitcoin, that’s $80 billion of latest demand, and 2x greater than what’s flowed into Bitcoin ETFs.”
For perspective, BTC doubled from $36K to $72K within the Q1 2024 after U.S. spot ETFs debuted. Total, the asset has rallied practically 180% to over $110K since early 2024. But it surely has briefly retraced to $107K at press time.
BTC to eye $120K, says Glassnode
Nonetheless, on-chain indicators advised that BTC might eye $120K, in keeping with Glassnode. In its weekly on-chain report on 28 Might, the agency said,
“Within the occasion of additional upside, the $120k stage seems as a key zone of curiosity, with sell-side stress anticipated to speed up in and round this zone primarily based on on-chain worth fashions intersected in prior cycles.”
Supply: Glassnode
The agency’s $120K projection was primarily based on MVRV excessive deviation pricing bands. In early and late 2024, BTC worth consolidated between excessive bands (pink and orange). At the moment, this translated to $120K and $100K ranges.
It’s price mentioning, nonetheless, that profitability of STH (short-term holders) has surged 16% per the SOPR indicator.
However CryptoQuant’s Axel Adler noted that promoting stress was comparatively muted to previous profit-taking exercise to threaten BTC from climbing larger.
Supply: CryptoQuant
Put otherwise, the drop from over $111K to $107K could be a short cool-off earlier than a possible rebound.
That stated, the closest worth magnet within the short-term was liquidity pool between $104.4K and $106.2K. Over $5B of leveraged longs had been piled on this area, elevating liquidation dangers if BTC slips to $103K.
Supply: CoinGlass
Alternatively, a whopping $10B of leveraged shorts might be worn out if BTC jumps to $113K.
