15.06.202116:00 Forex Analysis & Reviews: Many large managers consider Bitcoin to be a "bubble". Outflows from digital funds have slowed - a sign of market bottom

Bitcoin hovered around $40,000, prompting discussions about whether the market is a bubble and whether it has any fundamental basis. From the latest report from Bank of America Corp. and the experts interviewed, it is clear that opinions about bitcoin and whether it is a speculative tool that makes a bubble has changed significantly. Even after bitcoin's 35% drop last month, most respondents are confident that it is a bubble.

About 80% of fund managers surveyed by Bank of America Corp. called the bitcoin market a bubble (up from 75% in May). The survey, which reflects the views of 207 investors with $645 billion in assets, found that "long bitcoin" is the second largest transaction after commodities, where the market is also very much subject to volatility.

The survey shows high skepticism among some professional portfolio managers about whether cryptocurrency is a viable asset class, given its extreme volatility and regulatory uncertainty. Concerns about bubbles are nothing new for cryptocurrencies, and many investors have expressed doubts about the feasibility of using an asset that does not have a fundamental basis.

Even though prices have fallen, investment banks are still adding this new asset class to their portfolios. Goldman Sachs Group Inc. said it plans to offer Ethereum-linked derivatives to customers, while Cowen Inc. plans to offer "institutional-level" cryptocurrency storage services.

The growth of bitcoin at the beginning of this week was directly related to a number of events.

Another message on Twitter from Elon Musk that Tesla Inc. will start accepting bitcoin as payment for cars, led to the growth of the world's first cryptocurrency. Prices also rose following statements by hedge fund manager Paul Tudor Jones, who reiterated his view that bitcoin is a good hedge against inflation. The president of Tanzania called on the country's Central Bank to start actively studying cryptocurrencies and everything related to them and also stated that the digital era of cryptocurrency and blockchain has arrived.

This news was enough for the bitcoin exchange rate to return to the area of major resistance, above which it is not possible to get out after the May collapse.

All this news has a positive impact on bitcoin, which has seriously gained weight, getting close to a major resistance of $41,100. Just above this level, the 200-day moving average passes, which can create a lot of problems for buyers. Therefore, only a break in this range with the subsequent exit of the pair beyond $41,100 will open a direct path to the world's first cryptocurrency in the area of $46,700 and $52,000. However, such a sharp jump can only be expected after a real consolidation above $41,100. If there is no active growth above this range immediately, this may lead to a repeated return of the pair under this level and another decline in the area of the middle of the side channel ($36,300). It will also be necessary to carefully assess the activity of buyers, as it is quite possible to attempt to build a new upward trend from this level in the future.

While investors buy bitcoin, another outflow of funds is recorded. However, it is worth noting that the withdrawal of money from investment funds slowed down somewhat last week. In addition to the withdrawal of funds invested in bitcoin, investors are clearly worried about the fate of the ether, reducing positions on it.

According to the CoinShares report for the week, ended June 11, digital asset funds received a net outflow of $21 million, compared to $94 million withdrawn from funds in the previous week. This may also indicate that the bearish mood has reached a peak, so you need to pay more attention to these indicators.

As for the technical picture of the ether, everything is also calm. The volatility from the low of $1,748 to the large resistance of $2,900 is gradually decreasing. The middle of the channel and, accordingly, the support is the large level of $2,260, which the bears have repeatedly fought, but it is not yet possible to overcome. If there is a breakdown, I think we will see an instant decline in the ether to the support area of $1,748. In the meantime, the bulls are aiming for a break of the $2,900 resistance, which will open a direct road to a high of $3,558.