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BCA Research warned investors to ‘stay away’ from the largest cryptocurrency (BTC). Elsewhere JPMorgan said that flows to Bitcoin funds are significantly weaker than in December. Should traders worry about that? Let’s find out.
After a huge sell-off in the previous week, Bitcoin turned to the upside. Some analysts believe it’s only the beginning of the further downtrend. Why? BCA Research pointed to the environmental concerns and tightening regulations as the main headwinds.
Indeed, a huge amount of energy is needed to mine Bitcoin. Thus, some environmental funds may be against the large energy consumption by miners on computer networks.
Besides, governments are interested in BTC losing its value as they don’t have enough tools to regulate it. Moreover, they can lose billions of dollars in revenue from the difference between the face value of money and its production cost.
However, the BTC is still up more than five times over the past year! A strong argument against people who see a speculative bubble. For instance, Square and MicroStrategy used the recent BTC drop as an opportunity to buy the dip.
In the short term, the BTC is likely to rise as the downside is limited by the support of $45,000, which the cryptocurrency has failed to cross several times. If it manages to break above the high of February 24 of $50,000, the way up to the next resistance of $52,000 will be open. The good news for FBS traders is that they can make both buy and sell trades. So a trader doesn’t need to hold already an asset to sell it. Thus, traders have a chance to profit in case of either outcome.
Don't know how to trade cryptocurrencies? Here are some simple steps.
Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
The United States will publish the Federal Open Market Committee Meeting Minutes on November 24, at 21:00 GMT+2.
Hong Kong’s HK 50 index rose and the Chinese yuan edged up as traders assess the outcome of the first virtual meeting between US President Joe Biden and Chinese leader Xi Jinping.
The US Institute for Supply Management will release ISM manufacturing PMI on July 1, 17:00 GMT+3.
The United States Bureau of Economic Analysis will release monthly Personal Consumption Expenditures (PCE) on June 30, 15:30 GMT+3.
The governor of the Bank of England, Andrew Bailey, will hold a speech on June 29 at 15:30 MT time (GMT+3).
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