Case for Bitcoin Bottom Near $40K Is Weak as Institutions Stay Away

Chart showing a decline in bitcoin held by the U.S. and Canadian funds and Canadian and European ETFs and ETPs. (ByteTree)

Adverse macro

Crypto services provider Amber Group said a continued rise in real or inflation-adjusted interest rates poses the biggest downside risk to bitcoin and risk assets, in general. “Bitcoin’s correlation with the stock market has gone up,” Amber Group said.

Non-directional trading preferred

Griffin Ardern, a volatility trader from Blofin, a crypto-asset management company, said traders might be better off betting on a volatility explosion by holding long positions in options than predicting and betting on where the price might be headed next.

Key support at $40,000

CEC Capital’s Kssis foresees a retest of $40,000 should the cryptocurrency fail to establish a foothold above $43,000 this week and favors protective strategies to ensure against a possible deeper decline. Traders typically buy put options or sell futures as a hedge against a long position in the spot market.

AEX Operation Team

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