As a seasoned crypto investor with a few years under my belt, I’ve seen my fair share of market ups and downs. The recent post-FOMC market conditions have shed light on an ongoing issue that is affecting Bitcoin’s recovery: the capitulation by miners.
After the Federal Open Market Committee (FOMC) meeting, it has become apparent that many Bitcoin miners are heavily selling off their holdings, leading to a significant market downturn. This mass exodus could serve as a harsh wake-up call for the market, exposing underlying concerns that may hinder Bitcoin’s potential rebound.
Although equities are surging, Bitcoin is struggling to pick up steam. The primary cause of this discrepancy can be traced back to Bitcoin miners, who have been capitulating after the halving event. In simpler terms, they’re selling off their Bitcoins in large quantities due to rising operational costs and decreased rewards. This mass sell-off is exerting downward pressure on Bitcoin’s price and preventing it from keeping pace with positive signals coming from other financial markets.
As a researcher, I would put it this way: The ongoing bankruptcy proceedings of Flowbank, which has a tri-party agreement with Binance, adds another layer of complexity to the already volatile Bitcoin market.
This summer is shaping up to be relatively tranquil with no prominent factors influencing the market’s direction and reduced market fluctuations. SEC Chair Gary Gensler hinted that a spot Ethereum ETF could be authorized by the end of the summer, but this development wouldn’t trigger an immediate impact on Bitcoin. The market is presently in a pause state, anticipating substantial news or occurrences to provide direction.
Ethereum’s (ETH) high volatility relative to Bitcoin (BTC), currently at a 10% premium, presents an opportune moment for traders. The expected shrinkage of the ETH-BTC spread, as ETH overwriters resume their activities and anticipate potential approval of an ETH spot Exchange Traded Fund (ETF), makes this seemingly tranquil summer an ideal time to engage in ETH accumulation trades and strategically adjust risk positions. This proactive approach can help mitigate complications during periods of heightened volatility.
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2024-06-14 16:05