Bitcoin, the world’s largest cryptocurrency by market capitalization, managed to end the week on a strong note, defying bearish pressure and a wave of negative regulatory news.
The cryptocurrency started the week on a promising note but faced extreme volatility Wednesday before stabilizing as reports of the collapse of First Republic Bank shares sparked fresh banking crisis fears in the United States. Unfounded rumours of imminent bitcoin sales by the US government and Mt Gox creditors further compounded the negative sentiment.
Arkham Intelligence, the firm accused of sending the false Bitcoin sales alerts, however, came out denying any wrongdoing, noting that the mistake could have arisen from an alert sent by a third party. The incident coincided with a sharp drop in Bitcoin’s price, which fell 6% in about one hour.
Besides interest rate concerns amid sky-high inflation, regulatory pressure has also been mounting on the crypto sector. Earlier this week, Binance CEO Changapeng Zhao reportedly hired a team of defence lawyers to represent him personally as the exchange faces scrutiny from multiple US investigators.
On Thursday, Paul Grewal, chief legal officer at Coinbase, stated that the exchange “will defend itself vigorously in litigation if it comes to that” referencing the wells notice it recently received from the U.S. Securities and Exchange Commission. These moves could compel more crypto players in the US to fight back, with major financial regulators remaining adamant about engaging them through dialogue, according to some industry experts.
That said, despite Bitcoin remaining strong in the face of mounting regulatory concerns and FUD, some pundits have, however warned that it could still plunge lower. According to Gareth Soloway, Chief Market Strategist at InTheMoneyStocks, crypto winter may still be far from over. In an interview with Kitco, the pundit shared his predictions for Bitcoin, noting that $30,500 could be a very hard resistance to break. He warned investors against falling for Bitcoin’s recent resurgence, suggesting it’s a bull trap.
“Don’t be fooled. I’ve been through many bear markets and commodities in the stock market in crypto in my trading career and sometimes it turns out to be the lipstick on the pig here, and it could still roll over and head lower. So, I still think there’s a chance for $12,000 to$13 000- maybe even nine thousand,” he said.
At press time, Bitcoin was trading at about $29,215, up roughly 0.76% over the past 24 hours. In the past week, the cryptocurrency has gained about 4.55%, as per CoinMarketCap data.