A new bottom? Market capitalization fell by $ 26 billion in a few hours.
Launched projects of Starbucks, Microsoft and several other companies, potentially will pave the way for the development of Bitcoin ETF. The companies announced on Friday that they are working on the creation of Bakkt.
Bakkt will use Microsoft Cloud to create an open and regulated digital ecosystem of crypto assets. In other words, Starbucks and other companies give Bitcoin a good triger for growth.
In fact, the possibility of a regulated market for the development of digital currencies is positive news, but this is only an opportunity, and the link between this initiative and the potential launch of Bitcoin ETF is, at best, negligible. And even if we see such a market in reality, which can take years, we still have to wait for the SEC to catch up and approve another Bitcoin ETF offer. So, I would not bet on the newsflow on Bitcoin ETF.
At BitStamp, we saw a period of pronounced depreciation. This step led to the fact that Bitcoin from $ 8,500 fell to $ 7,000 at the time of the news release. This is a very strong move down. What can this mean for the market? We immediately see that Bitcoin has recently passed several levels of Fibonacci retracement, based on the previous April rally. But the movement continued, and Bitkoyn fell below the level of 78.6% and remained lower. This fall is quite strong and we can see a short-term rebound. Does this mean that we have to move to hypothetically long positions? More likely no than yes.
Yes, we could see a short-term recovery from this point, but the current situation assumes that the outlook remains bearish, and any recovery may be weak. If we look at RSI, we will see that it is still quite far from oversold levels. This indicates a result in which any correction will be erased and an even greater decline will follow. On the long chart of Bitfinex, we see that the deviations are already sufficiently pronounced to be fully visible from a long-term perspective. From a long-term perspective, recent consolidation is well suited to unfolding a long-term downward trend. The recent upward movement seems to have formed a local vertex that is lower than the previous local top, and, in fact, the other in a series of lower local vertices. This is typical for a downtrend. In such circumstances, recent actions towards growth are increasingly reminiscent of a correction in the longer-term decline, and the decline seems to be that it will continue in the future, increasing profits in our hypothetical positions.
To summarize, in my opinion, Bitkoyn began what could become a serious recession.
Eldiyar Muratov for RBC