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Bitcoin price expectations amid rising concerns of regulatory tightening

Today's market analysis on behalf of Rania Gule Market Analyst at XS.com

 

May 14, 2024 (Investorideas.com Newswire) The cryptocurrency market cap today stands at $2.2 trillion, down 5.2% over the past seven days, despite showing some growth over the weekend. The market cap peaked on March 14th, but the active decline has been ongoing for about a month, with a series of lower highs and lows. Bitcoin started trading today at $62,378.

From my perspective, over the past week, the cryptocurrency market, led by Bitcoin, has stabilized near the upper limit of the descending channel. This was supported by increased risks in stock markets on one hand, selling pressure from miners, and concerns about cryptocurrency regulation on the other.

I believe that the movement of the Bitcoin price is significantly affecting the overall performance of the cryptocurrency market at the moment, especially with the drop to around $60,000, which could lead to Bitcoin consolidating below this level and triggering panic selling. The positive scenario, in our view, will become the main scenario with a rise above $65,000, with the price holding above the 50-day moving average and the reversal zone in early May.

It's worth mentioning that the American investment capital fund Pantera Capital recently stated that it has invested a significant amount in TON, which has not been disclosed yet. Pantera attributed its decision to invest in TON to the possibility of the project becoming one of the largest cryptocurrency networks. As a result, the TON coin rose by approximately 20% during the week, showing the best growth among the top 100 cryptocurrencies.

According to sources, the Securities and Exchange Commission (SEC) has reportedly reclassified Ethereum as a security without announcing it, while ARK Invest and 21Shares have ruled out signing for an immediate Ethereum ETF launch. This situation may indicate an attempt to "shuffle the deck" based on comments from the SEC, despite no official statements yet.

Peter Brandt, CEO of Factor, stated that the storage of cryptocurrencies and Bitcoin may soon be recognized as an illegal activity. According to a report by the SEC, Susquehanna, a giant trading and technology company with assets under management worth $481 billion, illegally invested $1.2 billion in several Bitcoin exchange-traded funds.

From my perspective, the recent improvement in Bitcoin's price performance is largely due to ongoing noise about exchange-traded funds (ETFs) in Hong Kong. While the Chinese government bans the sale of cryptocurrency-related products, a report by the South China Morning Post indicates that China's presence was 50% at the Bitcoin Asia conference in Hong Kong.

Amid speculation that trade agreements between China and Hong Kong could allow investors to access Bitcoin exchange-traded funds in Hong Kong, this is an important step for the markets. Recent data shows that UBS, Switzerland's largest bank, owns 3,600 shares in the BlackRock exchange-traded fund, according to filings submitted to the SEC. Bracebridge Capital, based in Boston, announced that it owns $433 million worth of Bitcoin through exchange-traded funds. Montreal Bank revealed its holdings of Bitcoin exchange-traded funds (BTC) in a new filing with the SEC.

I believe that when institutional investors begin to build massive and new positions in Bitcoin through the SEC, it indicates that the next stage of cryptocurrency adoption is underway, with both institutions and governments taking risks. The Salvadoran market is making significant strides in this endeavor, launching a website to monitor its national Bitcoin currency.

While funding rates continue in the neutral zone, indicating a healthier market in the future. Because funding rates are the mechanism used in perpetual futures contracts to ensure that the futures price remains aligned with the spot price of the underlying asset. These rates are essentially a way to balance trading positions between long-term and short-term traders in the cryptocurrency market soon.

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