September 19, 2021

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

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

Aaron Chomsky, Head of Investment Department, ICB Fund:

Bitcoin can be written off from accounts?After the bulls passed the psychological milestone of $ 30,000, the belief in a negative scenario could only increase. Especially if we take into account that the cryptocurrency market, like other risky assets, initially reacted 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 out of the stimulus policy, it did not come to its senses, unlike Wall Street.

And yet, the low of June 22 ($ 28800) BTC is able to "surprise" those who have taken the "short" in recent days. Supporters of technical analysis can see the breakdown of the lower edge of the descending triangle, but what prevents it from being made false and making the corrective figure more ornate in the form of a flat? In which there is still a lack of a final move upwards with a repetition of at least the June 29 high ($ 36,600).

Market situation

Indexes of fear and prevailing in the communitysentiment in social networks from Santiment has broken another bottom. The experts' forecasts also do not contain optimistic notes. On the side of the bulls, perhaps Anthony Pompliano, who played a fundamental card in the form of the continuation of the printing press due to the "delta" strain. But this is still speculative - in the United States, the situation with COVID-19 does not look critical, and thanks to vaccination, the current flight from risk, from which everyone has already managed to wean themselves, is rather technical in nature due to too high stock valuations.

On-chain statistics indicate a declineuser activity, on the other hand, the hash rate is growing, there is an outflow of coins from the exchanges, the majority has become accustomed to the accumulation, not the distribution of BTC, including miners. This is from the latest Glassnode report.

Institutionals Dormant - According to CoinSharesthere was an outflow from bitcoin 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 has already been invested in investment products.

External factors

Rather, we simply see sales from the outside.a retail that never bounced and reacted to ominous headlines. For example, the development in the United States of the regulatory framework for stablecoins and the prohibition in the EU of anonymous transactions. The latter was only a matter of time - the corresponding FATF (Travel Rule) standard was developed long ago and will be adopted 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 the cryptomaximalists like it or not, the only way to legitimize space. According to the results of the next investment round, the FTX crypto derivatives exchange was estimated at $ 18 billion. Its founder, Sam Bankman-Fried, did not rule out the takeover of Goldman Sachs in the future.

This kind of ambition doesn't seem unfounded, ohwhat the readiness of investors to support the company says. Among them are leading Silicon Valley venture capital firms (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.