Saturday, June 10

Strong rebound: cryptocurrencies take flight and rise up to 14% in a day of high volatility

Despite the rises, the collapse continues to be more than 15% in the last seven days and the correction from the historical maximum of November, at US$69,000, of almost 50%.

The violent volatility of these days is due to multiple factors that have been weighing down the price since the beginning of this year, among which greater regulation in the US or Russia of the cryptocurrency industry stands out. In addition, the imminent monetary policy meeting of the US Federal Reserve (Fed) and the tensions between Russia and Ukraine, as well as with NATO and the US, have caused a real selling panic in risk assets, which has fueled the cryptos.

Wall Street’s huge bounce on Monday also added to the explosive mix, given bitcoin’s huge correlation with the US stock market, especially with the tech sector.

While the last hour on the conflict goes through the fact that the US has prepared 8,500 troops for a possible Russian attack against Ukraine, the nerves before the Fed will increase in the coming hours, since steps are expected to contain the runaway inflation and end the easy money, the main engine of exuberance in the ‘crypto’ market. “The story is really how aggressive the tightening is,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Bitcoin is now at a critical juncture where analysts say further selling could reverse its long-term uptrend. Today it is tested: “The psychological blow of losing $40,000 is nothing compared to what happens if $30,000 falls,” says Craig Erlam, an analyst at Oanda. “This is a significant level of technical support that was maintained throughout 2021, despite undergoing extensive testing early last year and throughout the summer. If this falls, things can get very complicated”, he warned with Bolsamanía.

In the very short term, “everything is possible, including a violent rebound in the form of a ‘pull back’ to the resistance (previously support) of $40,000,” comments José María Rodríguez, a technical analyst at Bolsamanía. “And more, considering that we have the price at the base (short-term support) of the bearish channel through which the future of bitcoin has been moving from the record highs of November at $69,355.”

“In any case, experience tells me that despite the 50% drop from all-time highs there has been no capitulation. There is fear, concern, many doubts, but there is no selling panic”, concluded the analyst.