The current correction in Bitcoin is linked to the alleged tightening of cryptocurrency regulation in the United States relating to the de-anonymisation of transactions. However, there is no talk yet of a sustained bear trend. This is according to experts surveyed by ForkLog.
On June 8, Bitcoin fell below $33,000 after a prolonged period of sideways movement. By the time of writing, the coin had recovered to around $33,314.
According to professional trader Artem Zvezdin, news from the United States bears on the technical picture of the crypto market:
“Traders have not been buying much in the $30,000–$32,000 range, which means that there is a high likelihood the market could fall further in the near future.”
He did not rule out a short-term rise of Bitcoin to the $36,000–$38,000 range, but subsequently expects the coin to continue falling all the way to $20,000.
The deanonymisation of cryptocurrency transactions could seriously affect Bitcoin’s popularity, according to Yuri Mazur, head of the data analysis department at CEX.IO Broker. The positivity is not aided by statements from former U.S. President Donald Trump, who also urged authorities to tighten control over the circulation of cryptocurrency on the country’s territory.
“While we adhere to a modest scenario for Bitcoin, which envisions the asset oscillating in the $35,000–$40,000 range with periodic spikes beyond it. According to the CEX.IO exchange, Bitcoin was trading at $32,901, which represents a short-term attempt to break out of the range,” Mazur noted.
The expert explained that Bitcoin price returning to the range $35,000–$40,000 by the end of the week does not signal bearishness, nor does it indicate bullish sentiment:
“A bear trend could be signaled by Bitcoin holding below the $30,000 mark, and technically such a scenario would imply a possible return to $20,000–$25,000.”
Leading Exante strategist Yanis Kivkulis also sees prerequisites for bears taking the initiative.
“Crypto assets are worth what new buyers are willing to pay for them. This makes them vulnerable to a turn of fortune: as soon as the price lingers at a high level for a long time – that’s the first bell for the bears. It sounded when Bitcoin failed to push above $60,000 and regain that level after the April pullback,”
The second signal, in his view, was the intensification of selling in May relative to the two previous months’ averages:
“The first drop was overly impulsive, and throughout the second half of May the price consolidated, but could not resume the rally. We saw similar patterns in 2014 and 2018 after the peaks of that time.”
A drop below $32,000 could trigger the capitulation of investment funds, the Exante strategist suggested. He also did not rule out that retail investors would come to the rescue in this scenario.
“It is also worth considering the scenario that Bitcoin, and the entire crypto market, will be sold off in the coming months as attempts to rise fail, gradually driving the price toward $20,000. Looking at prior episodes, further declines would be protracted, lasting more than six months,”
Trader Michaël van de Poppe noted that, amid ongoing consolidation, some altcoins in BTC pairs are faring well.
Still, #altcoins against $BTC are doing fine. Just consolidating.$ETH and $ADA are knocking the doors of the yearly highs and are eager to break through.
I think they will once #Bitcoin is bottomed.
— Michaël van de Poppe (@CryptoMichNL) June 8, 2021
“Ethereum and Cardano are on the verge of reaching their yearly highs. I think they will break them when Bitcoin hits bottom,” he wrote.
Overall, experts believe Bitcoin is currently facing a sharp lack of positive news. Growth could only be triggered by a meaningful improvement in the fundamental backdrop, according to Yuri Mazur.
“Positive news for the entire crypto market could boost investor interest in Bitcoin. Such a catalyst could be news about the Ethereum network, which is slated for a major upgrade,”
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