Bitcoin
Bitcoin Investors See Sideways Trading in June, With Focus Turning to Washington
Markets are approaching the official start of summer, but bitcoin could languish in June. The top cryptocurrency jumped 13% in May, according to Coin Metrics, its eighth monthly gain in the past nine months and its best month since February, when it soared 44%. This is due to last week’s ether-led rally ahead of the SEC’s approval of a rule change allowing ether ETFs in the US, when ether rose 20% in two days. Now, aspiring Ethereum ETF sponsors need to complete their S-1 registration forms for the individual funds. Until then, crypto doesn’t have a clear catalyst, with bitcoin ETFs and the halving in the rearview window. “Once these new products are fully approved by the SEC, possibly as early as the end of June, you can expect this to act as a catalyst for ether and the broader altcoin space, with bitcoin along for the ride,” said Antoni Trenchev. , co-founder of cryptocurrency exchange Nexo. BTC.CM=3M mountain Bitcoin has traded in a tight range since pulling back from its March record high usually precede wild moves – just look at the last halving year in 2020, when Bitcoin was stuck for five months before exploding upwards,” Trenchev added. Bitcoin has added $5,400 or 8.7% in the last three. months. June looks precarious for bitcoin – the cryptocurrency has an average monthly return of just 0.25% over the past 10 years, according to CoinGlass. Next month, investors will be paying close attention to the Federal Reserve’s next monetary policy meeting on June 11 and 12, especially after Friday’s reading of the central bank’s preferred inflation gauge the personal consumption expenditures price index. increased 0.2% in April, as expected. As a result, “bitcoin may continue to fluctuate within the descending channel,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank. Furthermore, “Bitcoin could quickly give up about half of its gains over the past two weeks and fall to around $65,000.” Fed policy aside, Washington “will continue to be the center of the world for crypto in June” with investors listening closely to messages from the US presidential campaign after the SEC’s adoption of ether ETFs highlighted changing fortunes crypto policy, Trenchev said. “The last month has witnessed the unlikely and unlikely sight of both sides of the US political divide warming up on crypto ahead of the US elections,” said Trenchev. “Witnessing the narrative continue to unfold in June will be a fascinating sport and will have huge implications for the long-term regulation of space.” Bitcoin miners face difficulties after halving. Elsewhere, Bitcoin’s price could come under some pressure from miner sales. Hasegawa said the average time it takes miners to find and process a new block is increasing, while the network’s hash rate – the combined computing power required by miners to mine bitcoin and process network transactions – is decreasing. This suggests that its profitability is weakening as its ability to mine new coins diminishes. “This indicates that the profitability of bitcoin mining is decreasing and miners are struggling to mine,” Hasegawa said. “If the price continues to fall, they may have to sell their bitcoin holdings to [maintain] cash flow, which could cause a vicious cycle.” Market watchers predicted this would happen after the bitcoin halving in April, which cut off an important source of revenue – the block reward – for bitcoin miners. Julio Moreno , head of research at CryptoQuant, attributes its current struggle to a decline in transaction fees following the halving. That said, there has not yet been heavy selling by miners, he said.