As Traders Eye Hong Kong’s Crypto Moves, Bitcoin Breaks Above $24K

Cooling regulatory concerns are pointing towards a continuation in the upward trajectory of digital assets, analysts say


Lee Yiu Tung/ modified by Blockworks


Bitcoin sprung to life Wednesday, pushing the majority of holders into profit — and propelling traders into the green across derivative and spot cryptocurrency plays.

Digital assets’ direction has been pivoting with regulation in the works, digital asset services firm Bit0oda told Blockworks. It’s not the only factor at play.

“On the long-term path toward realizing crypto’s long-term potential, the crypto ecosystem could see regulatory volatility through 2023,” the firm said in a statement. 

Not to mention that earnings season has slowed with the February Federal Reserve meeting fading into the rearview mirror. And then there’s the matter of trader chatter kicking up around Hong Kong’s move to bring crypto service providers into the same regulatory fold as traditional financial players.  

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Bullish sentiment related to Hong Kong and spreading appears to be based on publicly available information from December. Hong Kong regulators have rolled out a number of other crypto initiatives — including a proposal to ban algorithmic stablecoins.

That centered on the government’s legislative framework, slated to take effect June 1, which seeks to allow certain crypto service providers under the same regulatory umbrella as banks.  

It comes as US-based Interactive Brokers has moved to team up with crypto exchange OSL Digital Securities in a joint Hong Kong crypto push. 

Regional bitcoin flows from North America to Eastern Asia rose to $7.7 million over a seven-day average, indicating some traders had begun to move assets from region to region, Chanalysis data show.

The industry’s total market cap spiked 6.8% on Wednesday alone, according to CoinGecko data — from around $1.07 billion to $1.15 billion on the day.

Options, options

There’s also been a significant increase in aggregate open interest following the release of the US CPI data this week, according to Toby Chapple, head of trading at Zerocap of Australia. 

BTC’s open interest alone has risen by over $1 billion from $7.5 billion to $8.5 billion.

“The most telling market dynamic is the inverted put-call skew in the options market,” Chapple told Blockworks. “The seven-day calls option implied volatility vs put option is showing a very large swing to call buying, implying that the market has swung very hard to a bullish stance by market participants.”

According to data from Chainalysis, BTC’s total flows recorded its highest one-day increase in over 70 days, surging from 85,800 BTC to around 139,400 BTC. 

Data from crypto intelligence firm IntoTheBlock show, of roughly 29.2 million wallet addresses holding the asset, around 66% are in the money. Just 22% of those addresses are posting losses.

A majority bought in at an average of $18,800 — good for an increase of around 30% to bitcoin’s current floor. 

Trade volume across all assets rose to $120 billion — the highest point in more than six days — data provided by TheTie show.

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