Analysts Eye $65K as Bitcoin’s Support Level: Here’s Why

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Bitcoin has faced some turbulence lately, dipping below $65,000 on June 14th. However, despite this temporary drop, analysts remain cautiously optimistic about the future of the world’s leading cryptocurrency. Here’s a closer look at three key factors that could indicate a potential price floor at $65,000.

1. Shifting Regulatory Landscape in the US

The regulatory environment surrounding cryptocurrency in the US is showing signs of improvement. On May 16th, US lawmakers passed a Congressional Review Act to re-evaluate a rule from the Securities and Exchange Commission (SEC) requiring listed companies to record crypto assets on their balance sheets. This vote, while ultimately vetoed by President Biden, is seen as a significant development. It highlights the growing political influence of the crypto industry and the potential for more favorable regulations in the future.

Furthermore, the banking sector is increasingly recognizing the potential of cryptocurrency. Banks are starting to see the value in offering cryptocurrency custody services, a move that could further drive mainstream adoption. Combined, these trends suggest a potential softening in the US regulatory stance on crypto, which could be a major boost for Bitcoin prices.

2. Potential Shift in US Monetary Policy

The US Federal Reserve is facing a balancing act. While inflation remains above its target of 2%, recent data also shows a slight rise in unemployment. This suggests a potential economic slowdown on the horizon. The Fed may be forced to adjust its monetary policy to avoid a recession, which could involve lowering interest rates.

Historically, lower interest rates have been positive for Bitcoin. Investors often look for alternative assets like Bitcoin when traditional investments like bonds offer low returns due to high inflation. A shift towards a more accommodative monetary policy by the Fed could entice more investors into the Bitcoin market, potentially driving up the price.

3. Resilience of Bitcoin Derivatives Market

Despite the recent price drop, the Bitcoin derivatives market has shown surprising resilience. Bitcoin futures contracts, which represent agreements to buy or sell Bitcoin at a future date, remain optimistic. The premium on these futures contracts, indicating the difference between their price and the current spot price, continues to hold above 10%, a level typically associated with a bullish market.

The lack of panic selling in the derivatives market suggests that professional investors remain confident in Bitcoin’s long-term prospects. This ongoing support from institutional players could provide a crucial buffer against further price drops and help establish $65,000 as a firm support level.

Conclusion

While the future of Bitcoin remains uncertain, these three factors offer a compelling case for a potential price floor at $65,000. A more favorable regulatory environment, a potential shift in US monetary policy, and the continued strength of the derivatives market all point towards a bullish outlook for Bitcoin in the coming months.

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Author: Sb

This post was originally published on cryptonewsfarm.com

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