Bitcoin Fails To Return To Steady Growth
FxPro Financial Services Ltd | Aug 05, 2021 09:31AM ET
Bitcoin remains at $38K on Thursday, again running into a sell-off after a slight growth to $39.6K. The price fluctuations occur at shallow trading volumes, making the reliability of price bounces likely to be highly questionable.
On the data analysis side, Bitcoin got support from buyers on Wednesday on the downside to the 200-day simple moving average but failed to build on the upside, returning to that line on Thursday. Although it is important to keep in mind that for the past two months (almost forever for the crypto market), the first cryptocurrency has failed to grow above $40K.
The other day, comments by new SEC head Gary Gensler got crypto market participants very excited. The attention to his statement could be compared to one of the Fed's members. Investors tried to catch the mood and hints of the new head of SEC, which surprised even Gensler. His attitude could be interpreted as unfavourable for the current order of the crypto market.
The US authorities will tighten the rules, increase transparency, and do everything possible to protect investors. All this means de-anonymisation, pressure on crypto exchanges, and legalisation of all digital assets. However, apart from regulating cryptocurrencies, the tasks of the new SEC head are so many that digital assets are not on the pressing agenda.
Separately from that, US authorities said they intend to collect about $28 billion from cryptocurrency taxes. The lawmakers propose to raise this money by applying new requirements to exchanges and other significant participants in the crypto market.
On the positive side, Glassnode data showed the highest recent bitcoin outflows from centralised exchanges. About 40,000 BTC were withdrawn in just one week. The flow exceeds 100K per month. Now only just over 13% of bitcoin turnover is on cryptocurrency exchanges. In theory, this means that investors are not ready to get rid of their coins right now, which could point to a return of growth in the long run.
Also on the positive side, one could consider the resumption of allowing crypto projects to buy ads from Google (NASDAQ:GOOGL). The ban was made in June 2018 on the wave of popularity of ICOs, among which there were a lot of fraudulent ones. That is why now only regulated cryptocurrency organisations will be able to buy ads.
The FxPro Analyst Team
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