Bitcoin is too early to write off accounts, but one should prepare for a possible decline

Aaron Chomsky, Head of Investment Department, ICB Fund:

Can Bitcoin be written off?After the bulls passed the psychological threshold of $30,000, belief in a negative scenario could only intensify. Especially considering that the cryptocurrency market, like other risk assets, initially responded to the threat of the spread of a more dangerous strain of COVID-19. And later, when economists began to talk about the need for the Fed not to rush to start withdrawing from its stimulating policy, it did not come to its senses, unlikeWall Street.  

And yet the low of June 22 has not yet been broken($28 800) BTC is capable of “surprising” those who have taken shorts in recent days. Supporters of technical analysis can see a breakdown of the lower edge of the descending triangle, but what prevents it from becoming false and making the correctional figure more florid in the form of a plane? Which still lacks the final upward move with at least a repeat of the June 29 high ($36,600).

Market situation

Indexes of fear and prevalence in the communitysentiment on social networks from Santiment hit another bottom. Experts' forecasts also do not contain optimistic notes. On the side of the “bulls” perhaps Anthony Pompliano, who played the fundamental card of keeping the printing press running because of the "delta" strain. But this is still speculative – In the US, the situation with COVID-19 does not look critical, and thanks to vaccination, the current flight from risk, from which everyone has already become accustomed, is rather of a technical nature due to too high stock valuations.

On-chain statistics indicate a declineuser activity, on the other hand – the hashrate is growing, there is an outflow of coins from exchanges, the majority have become inclined to accumulate rather than distribute BTC, including miners. This is from the latest Glassnode report.

Institutions are inactive – according toCoinShares from Bitcoin experienced an outflow for the ninth of the last ten weeks, but in Ethereum the inflow exceeded it and the values ​​themselves are not dramatic given the amount of funds that have already been invested in investment products.

External factors

Rather, we simply see sales from the outsideretail, which never saw a rebound and is reacting to the “ominous” headers. For example, the development of a regulatory framework for steelcoins in the United States and the ban on anonymous transactions in the EU. The latter was only a matter of time – the corresponding FATF (Travel Rule) standard has long been developed and will be accepted by most jurisdictions.

The market also had to prepare for the first withtaking into account the signals given earlier, and this is more likely a blow to the profitability of companies such as Circle, and then a short-term one. Unlike Tether, the structure of their backing should not raise serious questions from the authorities.

Regarding the loss of anonymity of transactions –Whether cryptomaximalists like it or not, the only way to legitimize space. Based on the results of the latest investment round, the FTX crypto derivatives exchange was valued at $18 billion. Its founder, Sam Bankman-Fried, did not rule out a future takeover by Goldman Sachs.

Such ambitions do not seem unfounded, ohwhat does the willingness of investors to support the company indicate? And among them are the leading venture capital firms of Silicon Valley (not just crypto funds) and billionaire Paul Tudor Jones. 

Prospects for the development of the situation

Returning to the market, it is worth watching the low.from June 22 ($ 28,800) and for a retest of $ 30,000. There are chances for a more rosy end of the summer. Further, most likely, inevitably down to $ 20,000. Over the weekend, major players hedged longs with put options with strikes of $ 20,000 and $ 22,000. The ratio of put / call options indicates positive sentiment only with maturities at the end of the year and beyond.