A ‘bloody crypto’ Memorial Day weekend? Some Bitcoin bulls dread long vacations in the United States
Not all bullish bitcoin investors are excited about the upcoming US Memorial Day long holiday weekend.
The sun, the fresh air, the barbecues, the first big summer break as more and more doses of COVID vaccines hit the arms of Americans and those in other parts of the world. This setup seems to be taking a back seat to the growing turmoil about the downside that could crystallize further in the coming days for bitcoin BTCUSD,
and the larger crypto complex, including the dogecoin DOGEUSD,
and Ether ETHUSD,
on the Ethereum blockchain.
“There is a bloody crypto weekend ahead,” Yves Lamoureux, president of macroeconomic research firm Lamoureux & Co., told MarketWatch on Friday.
U.S. markets are closed on Mondays for Memorial Day, but crypto markets are open 24 hours a day.
Lamoureux is not the only one with Memorial Day anxieties. Billionaire digital asset entrepreneur Barry Silbert tweeted that he hopes bitcoin takes off over the weekend.
A report on CoinTelegraph speculated that bitcoin could still slip to $ 20,000 or less. Assets recently changed hands to $ 36,199, down more than 7%, on CoinDesk. Bitcoin is up 24% year-to-date, but down 44% from its mid-April high of $ 64,829.14.
Technical analyst Katie Stockton, who heads Fairlead Strategies, told MarketWatch that bitcoin has benefited from short-term oversold conditions over the past two weeks, stabilizing at nearly $ 34,000.
However, she said she was struggling with her 200-day moving average. Technical analysts use moving averages as gauges of an asset’s long-term and short-term momentum.
“My near-term gauges are pointing higher, but we don’t have any compelling medium-term ‘buy’ signal,” Stockton said.
With that in mind, the technical analyst said that support near $ 34,000 could be compromised after more than one rebound, “so we have our eyes” on $ 27,000 “as a possible entry.”
Prices for Dogecoin, the popular crypto meme conceived in 2013 as a light riff on the proliferation of Bitcoin alternatives, change hands at 31.6 cents, down more than 6%. Altcoin is down almost 60% from its all-time high earlier in May. That said, digital assets have grown 6,500% since the start of the year.
The # 2 crypto in market value, Ether, was down 9% and changed hands at $ 2,528, up almost 240% so far in 2021.
Even though they are volatile, crypto’s gains have for the most part exceeded those of conventional assets (with the exception of stocks even like AMC Entertainment Holdings AMC,
and GameStop Corp. GME,
The Dow Jones Industrial DJIA,
was up 0.2% on Friday and about 13% in the first six months or so of the year. The S&P 500 SPX index,
was 0.1% higher on the session and looking at a year-to-date rise of around 12%, while the Nasdaq COMP composite index,
was up 0.1% and heading for a 6.7% gain so far this year. GC00 Gold Futures,
meanwhile, were up 0.4% on the day and up 0.6% year-to-date.
Lamoureux says crypto weekends have become notoriously treacherous “because liquidity dries up” and “if there is blood in the water the sharks will pressure this drop and kill the weak competition that was in trouble. ”
The investor and strategist said the leverage of the system has also played a role in amplifying the movement of digital assets.
A Barrons.com report by Avi Salzman explained that there are basically two bitcoin markets: one dominated by traditional brokers, like Coinbase Global and Robinhood, and the other dominated by investors using derivatives, people who care less about the rise in crypto prices and are more focused on making money based on directional movements of assets.
Volatility can breed volatility in such an environment, especially so few investors are prepared to engage in carnage as downturns set in.
There is no narrative that explains the change in momentum of bitcoin and its ilk. A number of reports have linked it to China’s comments to Japan, but crypto moves don’t always sync with the headlines.
To be sure, the crypto community has always viewed slides as buying opportunities, favored for long-term investors.
However, new investors may face challenges when trying to withstand major dives.
Lamoureux said that one of the main factors that should provide support for bitcoin and mainstream crypto has been the rise of stablecoins, such as Tether USDTUSD,
whose price generally has a fiat currency peg and more consistent prices.
Stable coins like Tether tend to be viewed as a gateway to crypto, as they can facilitate transactions in other crypto using stablecoins. The market value of Tether is constantly increasing.