Bitcoin 2021 fanfare greeted by silence

Last weekend Miami played host to the world's largest gathering of Bitcoin investors and crypto enthusiasts for the 2021 Bitcoin Conference.

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While many crypto-related announcements were made during the conference, making most headlines news that El Salvador was introducing a bill to make Bitcoin legal tender. The theory follows that where one goes, others will follow.

As the event highlighted, there is growing evidence throughout an increasingly digitalised economy that Bitcoin is becoming more mainstream. However, the fanfare the event created has not generated a bounce in the price of Bitcoin whatsoever.

To some extent, this is courtesy of the influence that Elon Musk continues to hold over the industry. Musk followed up his tweet from late May that criticised the amount of energy used in the crypto industry, with another tweet on Friday that carried a broken heart emoji and the hashtag Bitcoin, interpreted to mean that Elon Musk has broken up with Bitcoin.

Also contributing to the this weeks selloff, news that US regulators have recovered the majority of the Bitcoin paid as ransom to the hackers of the US Colonial Pipeline.

It is now clear that regulators have the means to track Bitcoin transactions, a development that clouds the credentials of one of the key attributes that proponents of cryptocurrencies point to. That cryptocurrencies are decentralised and not controlled or regulated by any central authority and that transactions are anonymous.

In the short term, this is a headwind to the price of Bitcoin. However in the longer term, further regulation was inevitable and ultimately this will help provide more certainty to those looking to build creative and innovative digital solutions.

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After completing a 5-wave advance at the April $64,895 high, Bitcoin commenced a correction. While it was encouraging to see the correction hold the weekly trendline support currently near $31,500 more evidence is required to confirm a low is in place at $30,006.

Specifically, Bitcoin needs to remain above the support at $30,000 and then see a sustained period of trading back above the 200-day ma at $41,850. Aware that until then, the risks are for another leg lower (Wave V) towards $25/20k.

Source Tradingview. The figures stated areas of the 8th of June 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

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