Bitcoin: potentially interesting situation today, what’s happening?

The current situation of the Bitcoin price is potentially interesting.

In reality this is a complex situation, whose outcome is far from certain, but one of the possible outcomes turns out to be particularly interesting.

Today there are some positive data in this regard, although we will have to wait for something more substantial to confirm or deny the short- or medium-term positive potential.

The difficulties

Starting from last Friday, May 22, the trend of the Bitcoin price has entered a new period of difficulty.

In fact, while on Thursday 21 it reached a high of more than $78,000, the next day it hit a low of just over $75,000. Moreover, the day before yesterday, Wednesday 27, the daily low fell to $74,000, and yesterday even below $72,500.

The fact is that starting from Friday, May 22, the trend of the Bitcoin price has no longer been following, as it usually does, the average trend of growth assets. This is a real anomaly, although it is not something particularly rare.

The last time a similar anomaly occurred was at the end of November last year, and that anomalous period ended up lasting more than two months. Now, however, the anomaly has been in place for only seven days.

The causes

At the root of this negative anomaly there are two causes.

The first has also affected growth assets, and concerns the small resurgence of hostilities in the Strait of Hormuz between the USA and Iran. This anomaly reversed the previous trend, but it had a very similar impact on both Bitcoin and growth assets.

The real reason that caused the divergence is another. Most likely it is the slowness with which the approval process of the Clarity Act is proceeding in the USA.

The fact is that in the previous weeks there had been a certain optimism that the Clarity Act could be definitively approved before the beginning of the summer, while starting from May 21 the hypothesis that it will probably be necessary to wait until autumn has been spreading insistently.

All those who had taken long positions on Bitcoin in the previous weeks had to reposition themselves, so much so that starting from last Friday many long positions of institutional whales appear to have been closed.

These two causes have overlapped, accentuating the weakness of the Bitcoin price trend, but the second obviously has had no impact on other growth assets.

On top of all this, it should be added that on crypto exchanges the selling pressure of BTC appears to have been increasing in recent days, even if this is an increase primarily due to retail investors. On the other hand, the buying pressure from institutional whales has decreased sharply, and these two phenomena combined could only cause a drop in the price.

Forecasts

In the short term, news is expected, possibly positive, regarding the approval process of the Clarity Act.

It should not be forgotten that the USA still does not have a complete regulatory framework for the crypto market, and the Clarity Act would introduce one that is considered substantially positive by industry insiders.

If the hypothesis of approval by the beginning of the summer, or at any rate before August, were to be confirmed, the short-term reaction of the Bitcoin price could be positive. Instead, if there were no positive news in this regard, it will probably be necessary to wait a few more months.

On top of all this, it must still be added that the global geopolitical situation could also continue to sustain the difficulties in the price trends of growth assets, and therefore also of Bitcoin.

In the medium term, however, there is hope that sooner or later news of an acceleration in the approval process of the Clarity Act will arrive, but the geopolitical problems mentioned above remain.

The situation changes completely only in the long term, but at this moment making long-term forecasts really seems a bit too risky.

Waiting situation

Today, as well as yesterday, the situation seems to be one of pure waiting, especially on the part of institutional whales.

To tell the truth, yesterday evening some whales opened some new long positions, but these are really very small amounts, absolutely insignificant.

The problem is that, according to what was highlighted before, this wait in theory could last for days, weeks, or perhaps even months. In such a scenario it would be all too easy to imagine that, if the wait were to be prolonged, many weak hands would exit this market by selling and pushing the price of Bitcoin down further.

If instead the situation were to be unlocked, especially with regard to the Clarity Act, the waiting period could also end very quickly.

It should not be forgotten that the impact of the Clarity Act on the crypto market could be significant, in a positive way, even if only in the medium-long term and especially on assets such as Ethereum rather than Bitcoin. In other words, these days a very important game is being played regarding the future of Bitcoin and cryptocurrencies.