Bitcoin Declines as Indicator Shows Rally Could Lose Steam

[AlviNess]

Bitcoin’s price dipped below $57,000 on Tuesday as analysts said the extreme buying in the market could mean the rally may soon be running out of steam.

They pointed to the bitcoin Fear & Greed Index, which entered “extreme greed” territory last week and is at the highest level since early September, which preceded a sharp sell-off in bitcoin.


Comments from J.P. Morgan CEO Jamie Dimon at a conference on Monday contributed to a sour mood across crypto markets. Dimon stated that governments will regulate bitcoin, which he personally thinks is “worthless.”

On the regulatory front, “China’s domestic energy and power crunch has led to increased scrutiny of mining projects in various regions, such as the seizure of idle mining machines in inner Mongolia,” WuBlockchain wrote in a Monday newsletter.

Some analysts consider the recent rally in crypto prices is being driven by continued speculation the U.S. Securities and Exchange Commission (SEC) will finally approve a bitcoin exchange-traded fund (ETF), although others are skeptical an approval will have a beneficial effect on bitcoin’s price.

Latest prices
Bitcoin (BTC): $55,336, -3.7%
Ether (ETH): $3,466, -1.5%
S&P 500: -0.2%
Gold: $1,761, +0.4%
10-year Treasury yield closed at 1.566%
“The market is over-emphasizing (SEC Chairman) Gary Gensler’s public comments about support for the [Chicago Mercantile Exchange] and futures,” Jeff Dorman, chief investment officer at Arca, a digital asset management firm, in an email to CoinDesk. “We believe the concerns the SEC has raised historically regarding market manipulation of bitcoin and unregulated exchanges have not been solved.”

Still, some analysts remain optimistic, pointing to improving blockchain data and bitcoin’s rising price trend.more information