According to Willie Wu, the first cryptocurrency is currently not ready for a rapid rise in price and renewal of the historical maximum.
Chinese cryptojournalist and analyst Willie Wu argues that at the moment bitcoin looks unprepared for impulse growth and renewal of all-time highs. Wu identified three factors that are holding back the rise in price of the first cryptocurrency.
According to the analyst, the first factor is a high rate of bitcoin speculative activity. Wu argues that long-term strong holders continue to accumulate cryptocurrency, but a large number of positions are opened for speculative purposes.
Another factor that may hold bitcoin back is the launch of the first U.S. exchange-traded fund (ETF) based on bitcoin futures, Wu said. In his opinion, now the majority of institutional investors prefer to buy shares of the fund and futures, instead of buying Bitcoin itself.
On October 19, the first U.S. exchange-traded fund based on bitcoin futures began trading on the New York Stock Exchange (NYSE). Two days after the start of trading, assets under the Bitcoin Strategy ETF (ticker BITO) of ProShares exceeded $ 1 billion. The fund broke the record for the growth rate to $ 1 billion, which was held for 18 years.
The third factor, according to the analyst, is the overly optimistic sentiment of investors, who are confident in the further growth of Bitcoin and the entire cryptocurrency market.
“Whenever most investors are bullish, it’s very difficult for the price to go up because there are a lot of speculative longs in the markets,” Wu added.
At 12:30 Moscow time on November 15, Bitcoin is trading at $ 66.1 thousand.The first cryptocurrency is recovering after its price dropped to $ 62.2 thousand on November 12.