The bitcoin exchange rate briefly dipped below $60,000 last night, falling to about $59,700 on the Bitstamp exchange. The value of the largest and probably most famous cryptocurrency was the lowest since the beginning of May. In the morning, bitcoin was back above the psychological threshold of $60,000. The second largest cryptocurrency, ether, is also strengthening.
Negative trend
“The recent negative trend in the cryptocurrency market continues at the start of the week,” analyst Timo Emden of Emden Research told German weekly Der Spiegel. He justified this by profit taking and waning demand for exchange-traded funds (ETFs) on spot bitcoin from the United States. These funds were allowed in the US earlier this year and have led to strong demand for digital assets. The price of bitcoin subsequently rose to a record high of nearly $74,000.
“Given the uncertainty about the future shape of monetary policy in the U.S., the market ultimately lacks conviction,” Emden said. It is currently unclear when and to what extent the US Federal Reserve (Fed) might ease its monetary policy. This uncertainty weighs heavily on risk investments, which include cryptoassets such as bitcoin and ether, the analyst added.
Concerns
The market is also worried about the rapidly growing supply of bitcoin, Der Spiegel wrote. The insolvency administrator of trading exchange Mt.Gox, which collapsed about a decade ago, announced that it will start paying clients withheld bitcoins from July.
According to Emden, investors are still on thin ice in terms of the charts. A downward trend began in mid-June and intensified earlier this week. Moreover, the bitcoin price is currently well below the 21-day and 50-day moving averages, which describe the short- and medium-term trend.
Source: ČTK
