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Market Picture
Bitcoin rallied at the start of Wednesday's US session but unexpectedly plunged $1400 or 5% to $26.7K mid-session. This short-term dip shows continued demand for Bitcoin on dips below $27.5K.
The sharp price drop has sparked rumours that US government officials were behind it, selling previously confiscated Bitcoins. However, we also note that the fall was preceded by a rally, during which speculators may have built up liquidity for a following dump.
Either way, the price dynamics are becoming increasingly bearish: the formation of a series of descending highs, a consolidation below the 50-day moving average and a break of the April lows suggest that sellers are dominating.
Ethereum is also forming horizontal support at $1830, which has existed since early April. The fact that the price is increasingly testing this level, and one needs to develop a sustainable rally, makes one cautious about its short-term prospects.
New Background
Glassnode has seen an increase in transaction fees on the BTC blockchain and miners switching to hoarding tactics. Their sales could resume at levels above $30K.
The head of mining company Marathon Digital said that last year's downturn in the crypto market helped weed out "dubious operators" and spurred regulators worldwide into action. He pointed to the efforts of the EU, UK, Hong Kong, Singapore, and the UAE, as opposed to the US, which has been "partly behind" on the issue.
SEC Commissioner Hester Pearce said that the crypto asset market regulation bill (MiCA) passed in Europe and the UK's approach to digital asset regulation could be a starting point for a regulatory framework in the US.
German crypto start-up Unstoppable Finance announced its intention to create Europe's first fully regulated bank offering crypto-assets and DeFi services to customers.
About the author
Alex Kuptsikevich is a financial market professional with 16-years’ experience and a senior financial analyst at FxPro. He is the author of daily reviews on the impact of economic events with comments featured in top international and Russian media. Alex covers fundamental analysis, global markets, the foreign exchange market, gold, oil, and cryptocurrencies in his analytical pieces. As the senior financial analyst at FxPro, Alex is a guest expert in 1-tier global media such as Forbes, Coindesk, Euromoney and Morning Star.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.