Why $65K Could Be the Bottom for Bitcoin
Bitcoin recently tested the $65,000 support level, but it hasn't closed below $66,000 since May 17. While BTC has struggled to break past the $72,000 resistance, several factors suggest the downside is limited, signaling a potential bottom at $65K.
On May 16, U.S. lawmakers passed a Congressional Review Act to examine an SEC rule requiring listed companies to record crypto assets as both assets and liabilities. Senator Cynthia Lummis hailed this as a milestone, marking the first standalone crypto legislation passed by Congress.
Although President Biden vetoed the resolution, the support from Democrats highlights the growing influence of crypto in U.S. politics. Craig Warmke, a Bitcoin Policy Institute fellow, noted that Biden’s veto presents a challenge but also underscores the increasing pro-crypto sentiment among lawmakers.
The banking sector is also showing interest in offering crypto custody services, driven by the ongoing adoption of digital assets. Daniel McCabe, chief compliance officer of Flexa, believes pro-crypto lobbies and the banking industry could significantly impact future regulations.
Perianne Boring, founder of the Digital Chamber of Commerce, described Democratic support as a "watershed moment" for the Biden administration. This growing political backing could sway future decisions in favor of crypto.
The U.S. Federal Reserve faces pressure to lower interest rates to stave off a potential recession. Despite recent inflation data showing a CPI of 3.4%, slightly above the Fed’s 2% target, and a small rise in unemployment, the Fed's cautious approach suggests a possible policy reversal.
The U.S. 2-year Treasury yield fell to a 70-day low of 4.69%, reflecting concerns about economic growth. Meanwhile, the S&P 500 hit a record high on June 13, as investors moved towards equities and scarce assets to avoid inflation-eroded cash and low bond returns.
The Fed's decision to slow its quantitative tightening program signals cautious optimism about inflation stabilizing.
