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Bitcoin has not confirmed the status of the digital incarnation of gold


The report on the dynamics of consumer prices in the United States on Tuesday had a negative impact on the bitcoin rate. It did not live up to the hopes of those who counted on the hedging properties of the first cryptocurrency against rising inflation. Starting in April, when the market fell into a tailspin, it was not worth counting on this – even earlier, it was possible to fix the high sensitivity of bitcoin to macro data, which brings the Fed closer to the quantitative easing program. On Tuesday, we had to rely only on the fact that economists made a correct forecast, and after the release of the data, we could see a relaxation in the markets with the dollar selling and the increased demand for risk. But they underestimated the scale of the price increase. Inflation continues to unwind. The bottom line is that the futures market is already laying a 100% chance that the key rate will rise in January 2023. The curtailment of the ransom program should begin earlier. This acts as a risk factor for all risky assets, including Bitcoin, although the correlation of the first cryptocurrency with the S&P 500 has decreased to weakly positive values. With gold, by the way, too.Bitcoin has not confirmed the status of the digital embodiment of gold. On Tuesday, the precious metal did not change in price by the end of the day. This is perhaps welcome news for regulators wary of the growing influence of digital assets. In the latest report, the Bank of England pointed to the risks of transferring the negative dynamics of cryptocurrencies to the traditional market due to the “hobby” for the first institutions and corporations. This scenario is hardly acceptable. Market participants continue to see a consequence of this attitude – on Tuesday it became known about the suspension of the partnership between Binance and Clear Junction. The latter served transfers to / from Binance in pounds and euros. The rationale is a recent directive from the UK regulator that did not directly concern Binance Global. What is the threat? An example is the situation in India, where local bitcoin exchanges complain about difficulties in dealing with banks from which customers suffer. Platforms have to go through tricks in order to make fiat-crypto-fiat transfers. It is likely that Binance in fire mode is also considering various alternatives so that this does not affect the core business. Again, judging by the dynamics of Binance Coin – until the market has changed its neutral attitude to news of this kind. Despite the negative ending on Tuesday, the technical picture remains the same. The market returned to last week’s lows. On-chain data in the form of withdrawing coins from exchanges, restoring the hash rate, switching to accumulation by broad categories of participants, including miners, speaks for growth. On Wednesday, Fed Chairman Jerome Powell will speak, arm himself with all his eloquence and repeat the “mantras” about the “temporary” nature of inflation. You will not envy him, because such a theory is beginning to burst at the seams, but until the national debt limit is raised, he cannot speak directly about the timing of the normalization of monetary policy. Therefore, there is a chance that on Wednesday the dollar’s growth will be replaced by a more stable weakening. This will give breathing space to the cryptocurrency market. Bitcoin still has not completed the wave of growth to the upper border of consolidation around $ 37,000. Ethereum is also still capable of reaching above $ 2,400, although after the delivery of $ 2,000 it can do this through a retest of $ 1,800 +, if the growing momentum in the first cryptocurrency is again postponed ._______________ Aaron Chomsky , Head of Investment Department, ICB Fund


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