September 18, 2021

ICB Fund analyst: "Partial recovery of the crypto market does not guarantee the resumption of growth"

ICB Fund analyst: "Partial recovery of the crypto market does not guarantee the resumption of growth"

On Thursday, the bitcoin rate tested the mark at$ 38 thousand, having touched the upper border of the triangle forming since May 19. From the low on June 8, in less than two days, the growth amounted to a dizzying 24%.

Such mini-rallies are also typical for bearishmarkets, but for BTC with its volatility, this is in the order of things. While we can talk about the forced "unloading of shorts", before that, there was already a consensus on the crypto market of returning to $ 25,000 - 30,000, and according to the laws of market dynamics, everything happens in spite of or through a very convoluted path.

news from El Salvador with all due respect to the leader of thiscountries and those crypto enthusiasts who saw this as a sign of widespread adoption of digital currency, this is still an insufficient driver. Much more important is the position of regulators and institutional investors, who, as JPMorgan noted, judging by the persisting backwardation, are in no hurry to return to the cryptocurrency market.

Regulatory pressure is maintained.In China, mining was actually banned in three provinces, and in key Sichuan, mining was allowed to be completed until September, when there will be an excess of "green" energy generated by local hydroelectric power plants.

Arrests of persons allegedly connected with laundering took placefunds through cryptocurrencies. The head of the SEC in a recent interview again focused on the need for consumer protection, dashed hopes for an early approval of the Bitcoin ETF. Prominent US Senator Elizabeth Warren urged to deal with the "Wild West" in the digital asset market.

On Thursday, the market reacted positively to the newsfrom the Basel Committee on the development of regulations for those credit institutions that deal with digital assets. This is a sign of legitimization, but the demands are unlikely to be “soft” given the volatility in May. They can turn out to be "protective". So far, this is rather a step back compared to the situation at the beginning of the year, when the Office of the Comptroller of Currency under the US Treasury began to issue trust bank licenses to crypto startups.

Technically, bitcoin has reached the upper limittriangle, from where it can resume a smooth decline to the $ 32,000 area with the chances of a negative scenario being higher. Fixing above $ 38,000 for the bulls will not be a victory - the request for a reversal will have to be confirmed by a breakdown above $ 41,000. Then it will already be possible to speak of the completion of consolidation and the beginning of a new upward impulse. With regard to altcoins, the situation has not fundamentally changed these days. It remains neutral, which leaves the option of retesting the May lows in force.

text: Aaron Chomsky, Head of Investment, ICB Fund, photo: Shutterstock