-1720779234.png)
BTC Weakness Persists
Bitcoin bulls have been left empty handed on the back of yesterday’s US inflation data. Despite a further drop in consumer prices, leading to a surge in Fed easing expectations, Bitcoin has failed to rally with the futures market remaining muted around 57,215. The driver behind the persistent weakness in BTC is the current supply overhand linked to US and German government sales of seized crypto assets and the ongoing unloading of the Mt. Gox bankruptcy estate. With around $20 billion worth of BTC in the pipeline, the market is currently being subdued and is likely to remain depressed near-term while this flow of supply is resolved.
Bullish Longer-Term Outlook
Looking ahead, however, there is plenty of reason to remain bullish on BTC. Once the current supply overhand is resolved, BTC should return to trading on market fundamentals. With US inflation lower for a third consecutive month, expectations of a Fed easing over the remainder of the year are soaring with traders now looking for a t least two hikes, beginning in September.
Institutional Demand Growing Again
If current easing expectations strengthen and the Fed is seen pushing ahead with rate-cuts, this should help drive BTC back up over Q3/Q4. BTC ETF demand is likely to be a big catalyst and it's worth noting that over the recent pullback we’ve seen ETF inflows soaring again as institutional investors buy into the dip. Recent industry data also shows that BTC whales (those with > 1000 BTC in their wallets) have a high hold rate through the recent pull-back meaning that whales still anticipate a recovery rally. As such, while the current BTC sell-off might persist near-term, higher prices by year end still look favourable.
Technical Views
BTC
The sell-off in BTC has seen the market trading back down to test the 57,215 – 53, 525 support band around the bottom of the bear channel. This region is holding as support for now and while it remains intact, focus is on a rotation higher back towards the bear channel highs. To the downside, 47,465 is the deeper support to note if we break down.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.