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Market picture
Bitcoin is
up 1.4% in the past 24 hours, trading at $19,550 at the time of writing. U.S.
stock indexes had stepped decisively higher the day before, and index futures
are developing their gains by the start of European trading. A buoyant stock
market backdrop supports appetite for crypto assets, but overall fluctuations
remain unusually subdued.
Bitcoin’s
fluctuations since June fit into a triangle with a descending resistance line
and horizontal support of $18.8K, and now the price moves at the right
angle of the figure. Typically, this situation is resolved by a spike in
volatility on the way out of the range.
The
confirmation of the break of the long-term consolidation should be looked for
not earlier than the exit of the previous highs at $20.4K or the failure under
$18K, with more probability of the second variant. However, we note that the
downtrend in BTCUSD has lasted almost a year, taking away more than 70% of the
peak price and becoming attractive for long-term buyers.
According to
CoinShares, investments in crypto funds rose slightly last week after a slight
outflow the week before. Fund inflows totalled $12 million. Bitcoin investments
increased by $9 million, and Ethereum investments decreased by $4 million.
Investments
in funds that allow shorts on bitcoin increased by $7 million. Investors remain
apathetic; flows over the past five weeks have not exceeded 0.05% of assets
under management, CoinShares noted.
News background
Bitcoin has
the potential to break the link to traditional risk assets. This could happen
thanks to investors’ realisation that most threats come from governments and
fiat currencies, according to LookIntoBitcoin. Based on previous cycles of
investor capitulation, the timing is now suitable for strategic BTC buying.
According to
GlobalData’s worldwide survey of asset managers, wealthy investors still want
to invest in digital assets. And because cryptocurrencies only account for 1.4%
of their portfolios, they are willing to take maximum risk.
French
investment bank Société Générale has obtained permission from local regulators
for its subsidiary to store, buy, sell, and exchange cryptocurrencies.
According to
a new Coincub report, in the third quarter of 2022 Germany became the most
favourable country to run a crypto business, climbing to first place in the
rankings with Switzerland, Australia, the UAE, followed by Singapore. The US
slipped from first place to seventh because of unfavourable taxation policies
and a lack of clarity on crypto regulation.
This article was
written by FxPro’s Senior Market Analyst
Alex Kuptsikevich.
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