Markets
Bitcoin Investors Eye Sideways Trading in June as Attention Turns to Washington
Markets are nearing the official start of summer, but bitcoin could languish in June. The flagship cryptocurrency jumped 13% in May, according to Coin Metrics, its eighth monthly gain in the last nine months and its best month since February, when it soared 44%. That’s thanks to the ether-led rally last week, ahead of the SEC’s approval of a rule change allowing ether ETFs in the United States, when ether surged 20% in two days. Now, aspiring Ether ETF sponsors must file their S-1 registration forms for individual funds. Until then, crypto has no clear catalyst, with Bitcoin ETFs and the halving in the rear view window. “Once these new products are fully approved by the SEC, perhaps as early as the end of June, you can expect this to act as a catalyst for ether and the broader altcoin space, with the bitcoin coming,” said Antoni Trenchev. , co-founder of the crypto exchange Nexo. BTC.CM = $3 million mountain Bitcoin has been trading in a tight range since retreating from its March high “Bitcoin has barely moved over the past three months and the continued rise same thing is not necessarily a bad thing as periods of consolidation are long and boring usually precede violent moves – just look at the last halving year in 2020, when Bitcoin sat idly for five months. before exploding higher,” Trenchev added Bitcoin has added $5,400, or 8.7%, over the past three months June is shaping up to be a precarious month for bitcoin: the cryptocurrency has. an average month-on-month return of just 0.25% over the past 10 years, according to CoinGlass Trenchev noted that the return is distorted by two particularly bad years, 2022 and 2013. In the coming month, traders will be watching. the next Federal Reserve policy meeting on June 11-12, especially after Friday’s reading of the central bank’s preferred inflation indicator, the personal consumption expenditure price index increased by 0.2% in April, as planned. As a result, “bitcoin may continue to fluctuate in the descending channel,” said Yuya Hasegawa, a crypto market analyst at Bitbank, the Japanese bitcoin exchange. Furthermore, “bitcoin could quickly give up about half of its gain over the past two weeks and fall to around $65,000.” Beyond Fed policy, Washington “will continue to be the global crypto center in June” as investors closely listen to US presidential campaign messaging, after the SEC’s adoption of ether ETFs highlighted the changing political fortunes of crypto, Trenchev said. “The past month has witnessed the unlikely and unlikely spectacle of both sides of the US political divide warming to crypto ahead of the US elections,” Trenchev said. “Witnessing this narrative continue in June will be a captivating sport and will have enormous implications for the long-term regulation of space.” Bitcoin miners are struggling after the halving. Elsewhere, the Bitcoin price could see 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 hash rate – the combined computing power required by miners to mine bitcoin and process network transactions – is decreasing. This suggests that their profitability is weakening as their ability to mine new coins decreases. “This indicates that the profitability of Bitcoin mining is declining and miners are finding it difficult to mine,” Hasegawa said. “If the price continues to fall, they may have to sell their bitcoin holdings at [maintain] cash flow, which could cause a vicious cycle. “Market observers predicted this would become more pronounced after the bitcoin halving in April, which halved a key revenue source – the block reward – for bitcoin miners. Julio Moreno, head of research at CryptoQuant, attributes their current difficulty to a drop in transaction fees after the halving. That said, there have been no significant sell-offs from miners yet, he said.