🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Key Reason Why Bitcoin (BTC) Is Struggling Now

Published 14-06-2024, 06:32 pm
© Reuters Key Reason Why Bitcoin (BTC) Is Struggling Now
BTC/USD
-

U.Today - The post-FOMC state of the market reveals the current struggle of Bitcoin miners, who are massively capitulating and closing their positions. Such a tendency could become shock therapy for the market, highlighting underlying issues that are affecting Bitcoin's recovery.

Despite equities showing strong momentum, BTC is failing to gather any upward momentum. The key reason for divergence can be attributed to post-halving capitulation by BTC miners that, in essence, is capping the price at this level. Increasing the costs of operations and lower reward structures results in massive sell-offs by BTC miners, laying on bearish pressure and not allowing the BTC to catch up with good signals on the broader financial markets.

It is further worsened by the extent that Flowbank, a bank featuring a tri-party agreement with Binance, is in bankruptcy proceedings. Generally speaking, this development complicates market dynamics for Bitcoin even more.

We are in for basically a quiet summer, with no clear catalyst to drive the market either way and a lower volatility environment. Gary Gensler of the SEC has given a signal that a spot ETH ETF might get approved toward the end of the summer, but that would not be an immediate catalyst for BTC. The market is just in a holding pattern, waiting for significant news or events to guide it.

This makes it a strategic window for Ethereum, or ETH, traders. With ETH volatility at a 10 vol premium to BTC and the spread likely shrinking on ETH overwriters returning and anticipating ETH spot ETF approval, this quiet summer may be a good time to be involved in accumulation trades for ETH and a strategic redistribution of risks, to avoid complications in periods of high volatility.

This content was originally published on U.Today

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.