Long positions are now returning, with open long positions in Chicago Mercantile Exchange (CME) futures increasing last week, while in the week of April 20, the level of open positions had fallen to the lowest level in a month.
Rick Bensignor, president of investment strategy at Bensignor, said in a report Monday.
“Bitcoin created a huge gap last week and it is likely that Bitcoin will stay at this price level for longer than the bulls would like.”
Bitcoin has performed well in the mid-term, holding about an 80 percent gain so far this year, something most investors recognize, with institutions including Goldman Sachs Group and Bank of New York Mellon advancing their products around the cryptocurrency.
But some analysts are worried about the risk of a bubble, with JPMorgan strategist John Normand reiterating in a report Friday that the rise of bitcoin is more serious than any other financial innovation or bubble in the past 50 years.
One factor that could trigger a bubble burst in the future is Biden’s tax hike. Last week, sources revealed Biden’s plan to raise taxes on some investors. The market is concerned that Biden’s plan will affect stocks, cryptocurrencies. As a result, bitcoin fell as much as 8% on Friday.
However, some believe that the crypto market overreacted to Biden’s tax hike.
Oliver von Landsberg-Sadie, CEO of crypto payment services company BCB Group, said that Biden’s proposed tax hike has hit all markets, nevertheless, the impact of the tax hike on the stock market is likely to last, but cryptocurrencies are likely not to be affected in the long run.
What separates the cryptocurrency market from other markets is that an increasing number of large-scale cryptocurrency buyers have no intention of exiting the market. He believes that bitcoin’s drop on Friday was an “overreaction” to Biden’s tax hike, and that bitcoin’s next high could rally to more than $70,000.
And as Golden 10 reported last week, Goldman Sachs expects “Congress to reach only a relatively modest increase” and that the market is worrying too soon about the tax hike.
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