07.07.2022 – In the middle of summer, a winter looms for Bitcoin and co. The market will freeze, wasteland, no light anywhere. So is the extinction of cryptos imminent? There are some arguments for it. But those who are dead live longer. We shed some light on the background.
First of all, the recent sideways movement is striking – traders are looking for orientation. It is also noticeable that BTC has torn a fierce gap downwards in the four-hour chart, which should be closed at some point according to technical analysis. According to Craig Johnson, Chief Market Technician at Piper Sandler Companies, the key levels of the current trend channel are $18,910 and $21,557, for one. We tried to roughly draw that in. Literally, the analyst explained: “We’re just short-term consolidating in the context of a longer-term downtrend. (…) A close above $26,000 or $28,000 could finally put a stop to the downward slide the token has been on since April.”
Source: Bernstein Bank GmbH
So where do we go from here? Bloomberg commented that investors in Bitcoin have now gone into hibernation. The bears would have taken command again in this crypto winter.
Private investors as the last bastion
The analyst firm Glassnode explained that private investors have withdrawn their tokens from the crypto exchanges and prefer to stash them in private wallets. Literally, Glassnode said earlier this week, “Bitcoin has seen a near complete expulsion of market tourists, leaving the resolve of HODLers as the last line standing.” HODL means Hold on Dear for Life. So crypto fans who refuse to sell.
Loss of confidence
The account emptings, in our opinion, are due to the fear that after Celsius, other exchanges will collapse; or that Exchanges will be shut down by the state as well as cracked by hackers. The 30-year-old crypto billionaire Sam Bankman-Fried, founder of the FTX exchange, recently warned in an interview with “Forbes” that some Exchanges are already virtually insolvent, only no one knows it yet. Institutional investors are also fleeing BTC: according to Coinshare, professionals from Canada in particular have withdrawn from the bitcoin market.
Attack on criminals
And so to the dark part of the market. Hackers are also likely to slowly leave, as they feel the pressure to search. FBI, BKA, Europol and co. follow the spurt of money – and Bitcoin, Ethereum or Tether have become enormously attractive in recent years as ransom for hackers or as transfer currency for money launderers. Last week, therefore, the European Parliament rubber-stamped a provisional recast of the Money Transfer Regulation. This lays down rules for transfers for the first time: in the future, crypto platforms must determine information about the sender and recipient when they process transactions – no matter how high the amount transferred. If necessary, the authorities will have to be called in.
Our conclusion from all this: We currently see few bullish factors that speak for the cryptos. However, all bearish news could now be priced in. Who knows if a few billionaires will not invest a little play money. Whether long or short – Bernstein Bank wishes successful trades and investments!
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