Why Bitcoin’s resistance to retesting the $25K support could be futile
2 min read
Bitcoin has been trading in a narrow 3.4% range for the past three days after successfully defending the $25,500 support on June 10. In this time, investors’ attention has shifted to the macroeconomic area as the United States Federal Reserve will announce its interest rate decision on June 14.
Cryptocurrencies might work independently from the traditional finance markets, but the cost of capital impacts almost every investor. Back in May, the Fed raised its benchmark interest rate to 5–5.25%, the highest since 2007.
All eyes will be on Fed Chair Jerome Powell’s media speech 30 minutes after the rate announcement as markets are
The 25% delta skew metric entered “fear” mode on June 10 as Bitcoin’s price faced a 4.5% correction. Currently at 4%, the indicator displays balanced pricing between protective puts and neutral-to-bullish call options.
The crypto bear trend looks set to continue
Normally, a 3% futures basis and a 6% delta skew would be considered bearish indicators, but that is not the case given the extreme amount of uncertainty regarding the economic conditions and the recent charges against Binance and Coinbase. The Securities and Exchange Commission (SEC) alleges those exchanges held unregistered offerings and sales of tokens and failed to register as brokers.
U.S. lawmakers have criticized the SEC for its heavy-handed approach to crypto enforcement. On June 12, Rep. Warren Davidson proposed a bill aimed at restructuring the SEC by firing Chair Gary Gensler and redistributing power between the commissioners.
The uncertain crypto regulatory environment remains a hurdle to attracting institutional investors. Furthermore, the recession risk for the U.S. economy limits the demand for risk-on assets such as Bitcoin, increasing the odds of the $25,000 support being tested.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
