Bitcoin Slips to $63K as Crypto Market Faces More U.S. Regulatory Pressure

As a researcher studying the cryptocurrency market, I’ve observed a significant price reversal after we surpassed the $65,000 mark early Monday. However, this upward trend was short-lived as investors grew increasingly cautious following news from Robinhood that its crypto division had received a Wells Notice from the SEC over the weekend. This disclosure typically indicates that regulatory action against the company is imminent.

Despite a modest retreat, cryptocurrencies have largely held their ground, keeping their values above the levels reached a week ago. Bitcoin dipped by 1.5% in the last day but remained more than 10% higher than its price on Wednesday.

In spite of the pause in Bitcoin’s rally, QCP Capital, a crypto hedge fund, noticed an uptick in requests for bitcoin call options with a $75,000 and $100,000 strike prices for September. This trend signifies growing confidence among investors that Bitcoin’s price will continue to rise in the upcoming months.

As a crypto investor, I’ve noticed some positive momentum in volatility and funding rates since the price reversal from last Friday and through the weekend.

Hong Kong ETF rumors

It’s possible that the recent market rebound from the previous lows was boosted by whispers regarding expanded availability of Hong Kong-listed Bitcoin and Ethereum ETFs to Chinese investors.

As a researcher, I’ve come across some intriguing news from Richard Byworth, the managing partner of Syzcapital. In a recent post on X, he mentioned that there are ongoing discussions in Hong Kong regarding the potential inclusion of crypto products within the Stock Connect facility. This significant development would grant eligible mainland Chinese investors access to listed shares in Hong Kong.

As an analyst, I would argue that making this move could potentially result in a surge of Chinese capital flowing towards alternative investments. Given the current instability in China’s real estate and stock markets, many investors might be looking for safer havens for their funds. Thus, this shift could mark the beginning of a trend where Chinese money pours into various asset classes outside of their domestic market.

Chinese investors have been prevented from investing in cryptocurrency exchange-traded funds (ETFs), with no clear indication from authorities regarding potential rule changes.

Last week, Bitcoin displayed a bullish closing, bouncing back effectively from its dip to $56,000. However, John Glover, the CIO at crypto lender Ledn, maintains that there’s a chance for further price declines before completing its correction from the record high of $73,000 reached in March.

Based on my analysis using the Elliott Wave theory, I believe the correction may have ended at $56,500. However, before the fourth and final wave concludes, I anticipate seeing the price range between $52-55,000.

As a crypto investor, I’ve come across Elliott Wave Theory, which proposes that price movements follow a predictable pattern in five distinct phases. Impulse waves, specifically waves 1, 3, and 5, represent the main trend with strong upward price action. In contrast, retracement waves 2 and 4 act as pauses or corrections within the impulsive price action.

After the corrective wave has run its course, I believe the price will advance towards approximately $92,000 with the next Wave 5 push.