• The Nasdaq Composite is soaring.
• But Bitcoin is still around $60,000.
• Here are four factors holding back the crypto rally.

The Nasdaq Composite is on the rise, having just reached its seventh consecutive day of record highs.

The Dow Jones Industrial Average and S&P 500 enjoyed similar highs, thanks to the chipmaker Nvidia and the investor frenzy around artificial intelligence.

Bitcoin, however, failed to keep up.

While market observers predict that cryptocurrency could rise as high as $200,000 over the next year, it held steady at about $65,000 last week.

Here are four factors holding back the top cryptocurrency.

Digesting half

Bitcoin is simply catching its breath after a formidable start to the year, said Adam Morgan McCarthy, an analyst at crypto data and analytics firm Kaiko Research. DL News.

The Nasdaq may be up 18% this year so far, but Bitcoin is up 53%, McCarthy noted. And it’s not just because Bitcoin tends to be more volatile – they are simply “moving on different factors”.

“Bitcoin has had a very strong start to the year thanks to regulatory developments specifically in the US,” Morgan said. “Bitcoin’s next drivers will be the long-term impact of the latest halving and ETF demand.”

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The fourth half, which occurred in mid-April, cut in half the amount of Bitcoin miners receive for maintaining the blockchain. As less Bitcoin is created, market participants expect the supply shock to push the price higher.

But the effects of halving “generally take a few months to become apparent,” McCarthy said — and are most visible when demand for Bitcoin increases.

“ETF demand in the U.S. could have a big impact here as more advisors and firms take on new investors in the coming months,” McCarthy said.

It’s normal for the quadrennial event to be followed by months of subdued trading, agreed Jacob Joseph, research analyst at CCData. Especially since the markets overheated in the months leading up to the halving.

Centralized exchanges recorded historic new volumes in March, and this speculation, as indicated by open interest, “was at unprecedented levels,” Joseph said. DL News.

Open interest is a metric that reflects the total number of futures contracts in circulation. The high amount of open interest tends to be due to speculative frenzy.

“In this sense, the market needs the current period of price cooling or consolidation before we see the typical rapid price expansion of Bitcoin and other digital assets,” said Joseph.

ETF exits

Last week was the worst period for spot Bitcoin exchange-traded fund outflows since March, amounting to US$620 million.

“Short-term outflows from spot Bitcoin ETFs have also contributed to negative sentiment in the market, negatively affecting the asset’s price action,” said Joseph.

“However, the upcoming launch of Ethereum ETFs, coupled with recent positive macroeconomic data, suggests that Bitcoin and major crypto assets are likely to soon reverse their trend and aim for new cycle highs.”

Mount Gox

Once the world’s largest cryptocurrency exchange, Mt. Gox has loomed large over the industry since it collapsed in 2014 after being hacked.

The reason? Approximately $9.2 billion worth of Bitcoin was held up in bankruptcy, waiting to be paid to creditors.

Now it appears that these 142,000 Bitcoins could flood the market at any time before the October 31st Mt. deadline. Gox for refunds.

The market could simply be waiting for these redemptions to occur.

“A mass Bitcoin redemption event is unlikely,” David Duong, head of research at crypto exchange Coinbase, said recently. DL News. “But concerns around these refunds could still constrain liquidity, as market players may avoid mobilizing new capital amid the uncertainty.”

Miners selling stakes

Bitcoin miners are also putting pressure on the price of the leading cryptocurrency.

Although the halving has restricted the amount of new Bitcoin that mining companies can create and sell, most of these operations still maintain formidable reserves of Bitcoin.

The sector dumped about $300 million of its Bitcoin reserves since the start of the year, according to analytics firm CryptoQuant.

And Marathon Digital, the largest publicly traded mining company in the US, offloaded more than $92 million in June alone – about 8% of its billion-dollar stockpile.

Eric Johannsson and Tom Carreras write about markets for DL News. Have a tip about Bitcoin? Contact eric@dlnews.com or tcarreras@dlnews.com

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