The downward correction of Bitcoin, which has been observed over the past few days, when the cryptocurrency was already “diving” below $9,000, makes everyone think about what will happen next. Analyst Cole Garner thinks that the cryptocurrency may reach $7,000, but there is a nuance. From his point of view, the market is likely to see such low levels of Bitcoin price for the last time and, accordingly, so attractive to entering the market.
Garner also believes that: “Technically, we’re still in a situation where the market is more focused on the growth of Bitcoin’s price.”
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There are several situational factors that influence the fluctuation of the Bitcoin course
Garner’s statement indicates that the current downturn in the cryptocurrency is due to a number of situational, but not fundamental factors. Earlier, it was mentioned that the influence of the third Bitcoin halving causes great shifts in the mining of the oldest cryptocurrency, as a result of which a number of weak players are forced to sell their stocks of cryptocurrency in order to stay “afloat”.
The third Bitcoin halving took place on May 11th. From that moment over the next four years, cryptocurrency miners will receive for each block only 6.25 Bitcoins. This means that, in anticipation of such a development, a number of mining companies have already abandoned the Bitcoin mining process, and this should reduce the competition of capacities for obtaining cryptocurrency. According to Alexandro de la Torre, vice president of the Poolin mining pool, those who left the mining business will not return to it, unless they upgrade their equipment to more modern ones.
Another event happened at the end of the week. June 26th was the date of execution of a large volume of options on Bitcoin, which are traded on the Chicago stock exchange of CME Group, worth a total of $290 million. In addition to this amount of funds, the exercise date was for option contracts on other markets, amounting to $385 million.
Traders had hoped that the cryptocurrency would fluctuate between $9,000 and $10,000, which was the range of the various setting prices at which they were going to buy Bitcoin. However, since Bitcoin was at the lower boundary of the corridor, around $9,100, most of the prices described in the contracts to buy the cryptocurrency were unprofitable – it was cheaper to buy Bitcoin directly in the market. This led to the fact that option contracts were unnecessary and traders started buying Bitcoin as well as futures for this cryptocurrency. Since the range of option setting prices was low, this did not lead to a large volatility of the oldest cryptocurrency.
The increase in the price of Bitcoin will bring back the optimism
Analyst Max Kaiser agrees with Garner on the upside potential of Bitcoin. Kaiser believes that the pessimism about the cryptocurrency will disappear along with the rise in its value. For example, he is sure that when a well-known Bitcoin critic and supporter of gold investments, economist Peter Schiff, sees the price of the cryptocurrency at $50,000 in the future, he will change his point of view.
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First published in CLICK CHAIN, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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