🔥🔥🔥 3 reasons why $65K marks the bottom for #bitcoin
Bitcoin Shows Resilience Amid Regulatory Shifts and Economic Pressures
- Despite testing the $65,000 support on June 14, Bitcoin (BTC) has not closed below $66,000 since May 17, indicating resilience amid regulatory and economic changes.
Regulatory Developments
- Congressional Review Act: On May 16, U.S. lawmakers passed this act to examine an SEC rule on crypto assets. Although vetoed by President Biden, the move shows increasing political support for crypto, highlighted by Senator Cynthia Lummis and Perianne Boring as significant.
- Banking Sector Involvement: Banks have economic incentives to offer crypto custody services, bolstering ongoing crypto adoption. This growing influence in U.S. politics could lead to more favorable regulations.
Economic Pressures
- Federal Reserve Policies: The U.S. Federal Reserve is under pressure to lower interest rates to avoid recession. Inflation remains above target, and the labor market is softening. The 2-year Treasury yield dropped to a 70-day low, reflecting concerns about economic growth.
- Market Reactions: Investors are moving towards equities and scarce assets like Bitcoin to avoid inflation and low bond returns. The Fed's cautious approach in slowing quantitative tightening signals optimism that inflation is stabilizing, but high borrowing costs still suppress economic activity.
Bitcoin Derivatives Market
- Derivatives Metrics: Despite an 8.5% price drop between June 6 and June 14, the Bitcoin futures premium remained robust, staying above 10%, indicating a bullish market. This suggests no significant stress or excessive demand for short leverage, reinforcing the $65,000 support level.
Summary
The resilience of Bitcoin, amid favorable regulatory developments and cautious economic policies, suggests limited downside risk. The ongoing interplay of these factors indicates potential for Bitcoin to maintain strength and possibly rise further.
Source - cointelegraph.com
