Bitcoin Firms Despite Solana Hack, Analyst Sees BTC Invites ‘Smart Money’ Again

Bitcoin and Ethereum traded higher on Wednesday night as the global cryptocurrency market capitalization rose 1.8% to $1.07 trillion at press time.

See also: How to get free crypto

Why it matters: After a strong development on Wednesday, risk assets remained firm towards the evening. Bitcoin hit an intraday high of $23,578.65, while Ethereum rose to a 24-day high of $1,678.10.

Stocks also rose on Wednesday, with the S&P 500 and Nasdaq ending the day 1.6% and 2.6% higher, respectively. At press time, US equity futures were marginally in the red and trading flat.

This week has been dominated by cryptocurrency hacking. On Tuesday, the network was linked to the ninth largest cryptocurrency Solana (SOL) gets hacked. On the same day, $190 million was reported stolen from Coinbase-backed cryptocurrency bridge Nomad.

GlobalBlock analyst Marcus Sotiriou said in a note, seen by Benzinga, that Bitcoin had shown strength despite these hacks.

Sotiriou pointed Coin shares data indicating that Bitcoin-focused funds saw inflows last week totaling $85 million, while short-Bitcoin funds saw outflows of $2.6 million. The analyst said this was the first week of outflows for the short-Bitcoin product after a 5-week streak of inflows.

“As these funds are usually bought by institutions and high net worth individuals, this is a signal that smart money is very interested in buying crypto at these prices.”

Still, for the apex coin to move higher, it needs a factor that is cryptocurrency-specific, and the news cycle has not been positive for Bitcoin, said Edward Moya, senior market analyst at OANDA.

“Bitcoin needs a crypto-specific catalyst to trigger a meaningful move above the $24,700 level. The news has not been positive for crypto since wallets with Solana have been hacked and Nomad, a key bridge protocol, was exposed to a security exploit and lost nearly $200 million.

Cryptocurrency trader Justin Bennett tweeted that Bitcoin needs to regain the $23,450 mark to open up for higher prices.

GM legends!

So far, $BTC holds over $23,000 of support on a daily closing basis.

But a claim of $23,450 is needed to open up higher prices.

Cut cut. #Bitcoin pic.twitter.com/iw0WqFrJ3v

— Justin Bennett (@JustinBennettFX) 3 August 2022

CryptoQuant CEO Ki Young Ju said Bitcoin’s early investors tend to be visionaries, miners or criminals as they factor in a whale transaction at the end of July.

Ki singled out a transaction on July 20, when 1,100 BTC worth nearly $25.29 million was moved after 8 years. The head of on-chain analytics platform CryptoQuant shared a note saying the coins belonged to retired miner “Ghash”.

#Bitcoin Early investors:

1/ Visionaries
2/ Miners
3/ Criminals

Still lots of dirty old whales related to drugs, gambling, money laundering, hacking, etc. Luckily the new old whale move was from a retired miner.https://t.co/fm8q5IBo7f

— Ki Young Ju (@ki_young_ju) 3 August 2022

“These coins were not sent to exchange addresses yet. In other words, there is no selling pressure to now come out of this blockchain activity.”

CryptoQuant suspects that the coins were sent to a custodian service as the recipient address type can be used by multiple digital signatures (P2SH).

Ethereum’s supply of top exchange addresses surged as traders dumped their holdings onto major exchanges during the 2022 price drop, noted Sentimenta market information platform.

#Ethereum has seen the supply of top exchange addresses increase, which makes sense with traders dumping their holdings on major exchanges during the 2022 crash. Look for a decline at the top $ETH exchange address holdings as one #bullish signal. pic.twitter.com/Y9Q1vMfn14

— Santiment (@santimentfeed) 3 August 2022

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