Traders became less excited about Bitcoin’s quick rise above $40,000 in the middle of Thursday’s New York trading session when they decided to lock in short-term profits.
After reaching a high of $40,440 on Coinbase, the benchmark cryptocurrency dropped as much as 12.08%. On Friday, it hit a low of $36,410 before the opening bell in London, demonstrating that traders near the $40,000 level are showing tenacity.
Details and impending regulations
Bitcoin‘s price has risen from its recent lows, but it is still a bit unstable because people are worried about tighter regulations in the cryptocurrency market.
The BTC/USD exchange rate hit a low of $30,000 on May 19 after news of China’s ban on cryptocurrency transactions spread across the Internet.
In the same week that the US government made it a requirement that all transactions over $10,000 be reported to the IRS, more downward pressure was put on Bitcoin and other similar digital assets. This move was directed at regional crypto investors in the region.
Bitcoin, meanwhile, was prevented from going lower by worries over rising inflation. The most recent major report on inflation in the United States indicated a range of estimates between 4.2% and 4.4%, or about 2.2% more than had been anticipated by the Federal Reserve.
However, the officials all agreed that inflationary surges were “transitory” in nature, so this didn’t cause the Federal Reserve to reduce its present expansionary measures.
Due to different fundamental signals, the price of Bitcoin has settled into a choppy trading range, with $35,000 as temporary support and $40,000 as temporary resistance.
Ark Invest CEO Steps In
Cathie Wood, CEO of Ark Investment, meanwhile, tried to ease concerns about increased oversight of bitcoin businesses.
At this week’s Consensus 2021 conference, the well-known tech investor repeated what she had said before: that cryptocurrencies can’t be banned and that governments will have to learn to understand blockchain assets.
“I believe the international competitive dynamic is benefiting the United States. Wood stated last week in an interview, “I believe it’s been fantastic.”
Wood said that investors had stopped putting money into Bitcoin and other competing assets because of their bad reputations in the eyes of the market. This helped explain why institutional investments in the cryptocurrency market had dropped. The same argument was used by Elon Musk when his flagship company, Tesla, stopped accepting Bitcoin payments for its electric vehicles.
Later, though, the wealthy businessman gave money to a group of North American crypto miners who were working to track and cut carbon emissions from the crypto industry.
Wood’s Ark recently bought another 223,181 shares of Coinbase stock, bringing its total net exposure to the Nasdaq-listed bitcoin exchange to over $1 billion.