After reaching a peak close to $65,000, Bitcoin took a downward path that took the price below $35,000 towards the end of May. Seeks to take off again.
The Bitcoin, slowly but he seems sustained recovery began in June with a bid price and recrossing the line u $40.000. However, the market is divided between those who project new setbacks for the coming months and between those who project that there will be a rebound.
This Thursday the main cryptocurrency reached about $40,000. And the rest of the digital assets continue to rise with Ethereum near $2,900 and Tether at 1 to 1 with the dollar.
Cryptocurrencies posted revenue last week after scoring record leaks in the previous fortnight as investors took advantage of price drops in the market, according to data from digital currency manager CoinShares.
The inflow of funds to crypto investment products and funds totaled $74 million last week. The previous two weeks saw a historical leak of $151 million, representing 0.3% of assets under management.
Bitcoin products continued to see departures last week at around $4 million, according to data from CoinShares, bringing the total output for the past three weeks to $246 million. However, for the year, the unit records revenues of $4.4 billion. The world’s most popular cryptocurrency was up 3% last week.
Ether, the second largest digital unit in terms of market capitalization and the token used for the Ethereum blockchain, showed inflows of $47 million, with total revenue totaling $973 million. Its price rose 13% last week, but fell 41% the previous week.
Investment product flows also showed that altcoins, or tokens that are neither bitcoins nor ether, remained popular, with new funding for Cardano, Polkadot and Ripple.
Grayscale remains the largest digital currency manager, at $33.6 billion, but its assets under management fell from $47.3 billion two weeks ago.
CoinShares, the world’s second-largest digital asset manager and Europe’s largest, oversaw around $3.9 billion in assets as of last week, down from $6 billion two weeks ago.
What will happen to Bitcoin?
Those Bitcoin faithful looking to end last month’s long drop in the prices of the popular cryptocurrency may have to wait longer, warns JP Morgan strategist and market expert Nikolaos Panigirtzoglou.
“We had previously argued that the failure of Bitcoin to break above the $60,000 threshold would cause momentum signals to become mechanically more bearish and induce more disarming, and that this was likely a significant factor in the correction.” last weeks in cryptocurrencies.
Peter Brandt, CEO of Factor LLC and a seasoned commodity trader, was quite pessimistic about the future of the world’s leading cryptocurrency. The thought was reflected in a tweet in which he challenged to find a case in which Bitcoin has registered an all-time high just seven months after plummeting almost 50%.
His followers found, for example, cases like March 2020, the month in which the crypto asset reached a record of more than $20,000 eight months after falling to $3,850. However, Brandt was strict about the time period as the recovery took more than seven months.
According to some market analysts, Brandt wanted to forecast further declines as all declines on this scale with long rallies were from a starting point where the price was above “fundamental valuation.”
Other specialists begin to glimpse that Bitcoin has been having less volatility in recent days, which historically corresponds to important upward and downward movements. It remains to be seen which path the asset will take.
Rekt Capital looked to Bitcoin’s 50-week exponential moving average (WEMA) to argue that it is “back as support despite lower overall levels, and historically, this has been a key bullish flag.”
“In a sustained bull market, you can have a period of decline that is very deep, but as long as this period of decline remains above this indicator of bullish momentum, the WEMA 50, we can keep that bullish momentum preserved and the price rally. it may actually continue later, ”they explained.
It should be remembered that the bearish behavior of Bitcoin accelerated after Elon Musk, owner of the electric car manufacturer Tesla, announced the suspension of its purchases with the cryptocurrency due to the high environmental impact that its “mining” has.
There are several analysts who believe that a bullish cycle is coming. Their forecasts are based on five pillars: advanced China, devaluation of the dollar, a greener bitcoin, official support, and Bitcoin as an investment. (For more information read this note)
Bitcoin closed in May its worst month since September 2011 with falls of almost 40%. From its mid-April peak near 65,000, the top cryptocurrency fell about 45%. Despite this, there is optimism in the sector.
For example, according to Robert Kiyosaki, investor and author of the book ‘Rich Dad, Poor Dad’, the fall of Bitcoin “is great news.” “When the price reaches $27,000, I will buy again. Much will depend on the global macro environment,” said the businessman.
Although it failed to reconquer the $40,000 that now offers strong resistance, bitcoin’s slight recovery poses a hopeful scenario after a week with the largest effective losses in the history of the cryptocurrency market.
Analysts are optimistic despite losses in recent weeks. According to Willy Woo, there are indicators that point to a market recovery, as reported by Crypto site at the beginning of the week. Previously, the researcher had warned that this recovery would be slow and could take months.
In his recent posts via Twitter, Woo shared data from Glassnode on network behavior, arguing that the increase in active users on the network is a sign of BTC purchases amid the decline.
According to the most recent report from Glassnode, despite the price drop, a vast majority of Bitcoin addresses are holding onto profits. In total, 76% of the coins distributed on the network are above the price they were the last time they moved from one direction to another, which is considered a direction in profit.
“We do not know what the value of bitcoin will be tomorrow, in a week or in a month. But what we do know is that there is a macro trend that generates more and more money for bitcoin.” This quote belongs to the analysis firm Ecoinometrics, according to which bitcoin remains in the bull cycle despite the recent price drop.
According to the researchers, the cryptocurrency maintains a pattern that has been repeating after each halving of rewards for mining, the event known as halving that occurs approximately every 4 years.
On the skeptical side, Bank of Japan head Haruhiko Kuroda joined the list of central bankers who expressed doubts about the usefulness of cryptocurrencies in the real world.
“Most of the trade is speculative and volatility is extraordinarily high. It is hardly used as a means of payment,” Kuroda said of Bitcoin in almost coincidental statements with his peers at other central banks around the world, Bloomberg noted.
The president of the United States Federal Reserve, Jerome Powell, had said a month ago that cryptocurrencies are simply vehicles for speculation, and similarly, the vice president of the European Central Bank, Luis de Guindos, said that tokens should not be considered real investments.
“Looking at the unrest in the cryptocurrency market, there is a possibility that we will see another bumpy weekend in trading Bitcoin and other cryptocurrencies,” said Ipek Ozkardeskaya, senior analyst at Swissquote.