Cryptocurrency under pressure

Bitcoin briefly dips below 60,000 dollars

"The recent negative trend on the crypto market continues at the start of the week," commented Timo Emden from Emden Research.

(Bild: monsitj - stock.adobe.com)

Cryptocurrencies remain under pressure on the financial markets. On Monday, the price of Bitcoin, the oldest and best-known digital asset on the Bitstamp platform, temporarily fell to just under 59,700 US dollars (55,857.04 euros). This was the lowest level since the beginning of May.

Bitcoin recently traded slightly above the psychologically important USD 60,000 mark again. In a daily comparison, the losses amounted to almost 3,000 dollars or 4.5 percent.

Ether, the second-largest cryptocurrency by market value, also continued to fall. "The recent negative trend on the crypto market continues at the start of the week," commented Timo Emden from Emden Research. The expert referred to profit-taking and declining demand for exchange-traded spot ETFs from the US.

These had only been approved at the beginning of the year and had led to strong demand for digital assets. The Bitcoin price subsequently rose to a record high of almost 74,000 dollars.

"Investors have been impressively shown the downside of the ETF investment vehicles approved in the US since the beginning of the year," continued Emden. After the inflows, the outflows on the opposite side accelerated the downward pressure. There is currently little to suggest a sustained countermovement.

Tense wait for the FED
"In view of the uncertainty about the future shape of US monetary policy, there is ultimately a lack of convinced market players," added Emden. It is currently unclear when and to what extent the US central bank, the Federal Reserve, might ease its monetary policy. This uncertainty is particularly weighing on risky investments, which include crypto assets such as Bitcoin and Ether.

Bankrupt stocks resurface
The market also referred to fears of a rapidly increasing supply of Bitcoin. The insolvency administrator of the trading exchange Mt Gox, which failed around a decade ago, announced that redemptions of Bitcoin and Bitcoin Cash would take place from July. These are holdings that have resurfaced after the spectacular bankruptcy.

According to Emden, investors are also still on thin ice in terms of the charts. A downward trend began in mid-June, which has now intensified at the start of the week. In addition, the price of Bitcoin is currently trading well below the 21- and 50-day moving averages, which describe the short and medium-term trends. The much-noticed 200-day line is still providing support. It is regarded as a measure of the long-term trend.