Bitcoin is
moving within a divergent channel that was formed in April with a primary
support at $19,000 per coin. The bulls are seen to be weakening and therefore
creating additional opportunities for Bitcoin prices to decline towards $18,600
and $17,600. The rebound over the last week took place within the unstable
formation of an upward wedge and the return of Bitcoin prices to the support
level was just a matter of time. The mid-term target price for Bitcoin at
$15,000 per coin is intact.
There are
no reasons for the market sentiment to be changed now. NEXO has recently
withdrawn 152,000 ETH from the Maker lending protocol and has sent most of
these coins to cryptoexchanges. Therefore, hopes for a rally are still vague and
is the primary reason for investors to withdraw their funds. There is no
information to suggest any financial difficulties of NEXO, and this fuels some
optimism considering huge troubles faced by some other investors that are stuck
on the 3AC crypto lending platform with huge piles of uncollateralised loans.
There is no
optimism towards the soft landing of the U.S. economy as the Federal Reserve
(Fed) is usually unable to perform such landings. Moreover, this time the
situation is further aggravated by the highest inflation in the last 40 years
that requires unprecedented actions by the monetary watchdog. The recession
needs time to develop, and some 6-12 months are needed for it to take a grip on
the economy. As market participants are likely to tread with caution during
this period, the safe-haven U.S. Dollar is likely to get even stronger.
Bitcoin is trading
70% off its peak values, and investors are more inclined to surrender with
every new drop of prices. It is worthwhile to remember that many crypto
enthusiasts deposited their funds with Ethereum 2.0 contracts in order to
receive an opportunity to validate transactions and get passive income after the
Enthereum network would finally transit to the Proof-of-Stake mechanism. Such
opportunities emerged last November and some 11% or 12.98 million of overall
Ethereum in circulation are now bound to this contract. In the beginning some 8
million coins $40 billion worth were locked within the contract, now despite
large coin inflows the overall amount of the funds deposited are estimated at
$25 billion. Such deterioration of funds once again confirms high risk of a
long-term depositing of funds without any chance to withdraw them at any moment
when needed. So far, the date of such withdrawal opportunities is not even set.
The
Ethereum network has moved to the Proof-of-Stake mechanism with Ropsten
subnetwork successfully migrating to it on June 8, and Sepolia subnetwork – on
July 6. Goerli subnetwork is planning to announce its migration date on July
14. Once the last one is complete its migration to the Proof-of-Stake mechanism
there will be no problems for the entire Ethereum network to switch to it. At other
times this news would have certainly supported the market, but this time there
are only a few investors around who could initiate new investments because of
this reason. Any fundamental news is highly overestimated in its impact on the
market now, while technical analysis is probably the only answer for the
possible price movements for the moment.