on the crypto
Bitcoin's price took another hit Thursday morning, falling to around $ 31.000 as markets opened in Europe and the United States. Investors rushed to reap their short-term profits, worried about when - or if - another wave of new buyers would enter the market.
What moved the bitcoin market
Tether is the largest cryptocurrency stablecoin. With a price that remains close to that of the US dollar (here the quotation in real time), tether is the most popular method for Binance clients and other Asian exchanges to buy or sell bitcoins.
"In the US, traders attempted to trade in anticipation of lower Asian sessions," said John Todaro, director of institutional research at cryptocurrency analyst TradeBlock.
Several factors seem to have triggered the latest bitcoin sell-off: the applications of leverage, especially in Asia; fears that fewer buyers are entering the market; and uncertainty over cryptocurrency policies by President Joe Biden's newly inaugurated administration, according to analysts and traders.
The effect of Asian trading on bitcoin
“We saw some sales from institutions, but not significant,” said Chris Thomas, head of digital assets at Geneva-based Swissquote bank. “The trigger was the leveraged positions in Asia at the end of the day.
These move the market a lot due to the effect of financial leverage ”. On the technical side, traders said that the market has broken the uptrend in prices since Dec 11 and is looking at a new support level in the $ 29.000-30.000 range.
As the number of traditional investors and traders entering the bitcoin market has increased in recent months, the price movement has become more technique-driven, according to Bonnefous, and less affected by bitcoin supply and demand, he said.
What the institutions do
Some institutions, including some hedge funds, may use market uncertainty as an excuse to profit, Todaro added. Many of these traditional financial operators in the US and Europe arrived on the market before the steepest phase of the bitcoin rush and are therefore more likely to find themselves at higher profit levels given current prices.
But some potential investors may be scared of not knowing what the Biden administration will do with regards to bitcoin and cryptocurrencies. "Given the timing of the sale and the isolation of that sale from US companies, such as Coinbase, this could also indicate geopolitical aspects regarding the Biden administration that has become official in recent days," Todaro said.
Biden-nominated Treasury Secretary Janet Yellen has launched a possible 'tax unrealized' proposal, which would impact cryptocurrency investors - and also investors in any asset - and could have led to a new wave of sales. . "
