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Main reason why Bitcoin (BTC) is in trouble now
Arman Shirinyan
Bitcoin’s struggle can be attributed to one very clear and obvious factor
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The state of the post-FOMC market reveals the current difficulty Bitcoin miners, who are capitulating en masse and closing their positions. Such a trend could become shock therapy for the market, highlighting the underlying issues that are impacting Bitcoin recovery.
Despite the shares showing strong momentum, BTC fails to gather any upside momentum. The main reason for the divergence can be attributed to the post-halving capitulation of BTC miners which is essentially capping the price at this level. Increasing costs of operations and reduced reward structures are resulting in massive sell-offs by BTC miners, putting downward pressure and preventing the Bitcoin to catch up with good signals in broader financial markets.
Bitcoin/USD chart by TradingView
The situation is further exacerbated by the extent to which Flowbank, a bank that has a tripartite agreement with Binance, is in bankruptcy proceedings. Overall, this development complicates the dynamics of the Bitcoin market even more.
We expect a substantially quiet summer, without a clear catalyst driving the market in either direction and in a context of lower volatility. Gary Gensler of the SEC gave the signal that there is room ET The ETF could be approved towards the end of the summer, but this would not be an immediate catalyst for BTC. The market is simply in a holding pattern, waiting for significant news or events to drive it.
This makes it a strategic window for Ethereum, or ETH, traders. With ETH volatility at a 10 volume premium to BTC and the spread likely to narrow due to the return of ETH overwriters and the anticipation of ETH spot ETF approval, this quiet summer could be a good time to get involved in accumulation operations for ETH and a strategic redistribution of risks, to avoid complications in times of high volatility.
About the author
Arman Shirinyan
Arman Shirinyan is a trader, cryptocurrency enthusiast and SMM expert with more than four years of experience.
Arman firmly believes that cryptocurrencies and blockchain will be in constant use in the future. Currently he focuses on news, articles with in-depth analysis of crypto projects and technical analysis of cryptocurrency trading pairs.