On May 29, the bitcoin rate updated its maximum for three weeks, rising above $28.3 thousand. A few days before that, the asset fell in price to $25.8 thousand, but then went up again. According to CoinGecko, at 20:55 Moscow time, BTC is trading at $27.6 thousand.
The experts told RBC-Crypto about what caused the growth of the bitcoin rate, what factors will affect its price in the near future and what the data of the technical analysis of the BTC price chart indicate.
“Show maximum restraint”
ENCRY Foundation co-founder Roman Nekrasov
The reason for the moderate growth of the bitcoin rate was several factors. First, the market reacted positively to reaching a compromise on raising the US national debt ceiling. It has yet to be voted on on May 31, but the text is already known, as is the fact that congressmen have managed to reach an agreement in principle on it.
Secondly, investors expect a suspension of the US Federal Reserve’s key rate hike. If in April the Fed raised the rate by 0.25 percentage points, then in June such an increase is already assessed as unlikely. Most likely, the key rate will remain unchanged, which means that the flow of capital into treasuries will decrease and investors will increase their investments in risky assets, such as stocks, and some of the most risky investors will direct their funds to cryptocurrencies.
Thirdly, participants in the cryptocurrency market are encouraged by the news that Hong Kong will allow retail investors to trade cryptocurrencies on licensed platforms from June 1. Many market participants believe that such a move is a sign that mainland China is moving in the same direction. And this means the return to the crypto market of extremely active Chinese investors, who previously accounted for the lion’s share of trading volume in the crypto market.
This is what drives bulls in the crypto market. But there are also factors that hold back growth. Firstly, against the backdrop of an increase in the rate of bitcoin, miners increased sales of mined coins. This puts pressure on the rate and does not allow it to grow faster.
Secondly, there is still a large number of coins for sale on the market – these are bitcoins, which will be returned to the creditors of Mt Gox. Although this is unlikely to lead to a collapse in the rate, it could put pressure on the price if demand does not match the sudden increase in the supply of coins in the market.
Thirdly, US investors are still worried about the course towards tightening crypto regulation and possible problems with large crypto exchanges such as Binance, which the Commodity Futures Trading Commission (CFTC) recently filed a lawsuit against.
As such, June risks becoming extremely volatile, and investors should prepare to exercise maximum restraint and not give in to emotions.
Waiting for an impulse
CEO Cryptorg Andrey Podolyan
Technically, the price of Bitcoin has been in the bull flag for a long time (red lines in the chart below), and inside the flag, an exit from the wedge has been realized (green lines).
On the night of May 28-29, the BTC rate practically tested the upper edge of the flag. This was facilitated, among other things, by positive news on the US national debt: the issue is practically resolved, at least we are told so in the media.
The bullish flag on the chart aims to reach the levels of $32-34 thousand and reach the highs of this year. Therefore, it is worth carefully observing its upper face. On a breakout, a good bullish momentum is very likely.
Source: Cryptocurrency
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