As the markets approach the official start of summer, bitcoin may not see the same levels of growth that were experienced in the previous month. While the flagship cryptocurrency saw a significant 13% jump in May, marking its eighth monthly gain in the past nine months, there are concerns that June may not be as favorable for bitcoin investors. The recent surge in the price of bitcoin was largely driven by an ether-led rally ahead of the SEC’s approval of a rule change allowing ether ETFs in the U.S. However, without any clear catalysts on the horizon, bitcoin may struggle to maintain its upward momentum.
With the recent approval of ether ETFs in the U.S., there is anticipation that this could act as a catalyst for the wider altcoin space, with bitcoin potentially benefiting from the increased market interest. As aspiring sponsors of ether ETFs file their S-1 registration forms for the individual funds, there is hope that this regulatory approval could lead to a resurgence in market activity. However, until these new products are fully approved by the SEC, the crypto market may lack the necessary momentum to drive sustained growth.
Bitcoin has been trading in a tight range over the past three months, showing relatively little movement since retreating from its record high in March. While periods of consolidation are not necessarily a negative sign in the world of cryptocurrency, they can often precede more volatile market movements. With an average return of just 0.25% in the month of June over the last 10 years, according to CoinGlass, there is a sense of caution surrounding the outlook for bitcoin in the coming month.
The Federal Reserve’s upcoming policy meeting on June 11 and 12 will be closely watched by traders and investors alike, especially in the wake of recent inflation data. The central bank’s preferred inflation gauge, the personal consumption expenditures price index, rose as expected in April, signaling stability in the broader economic environment. However, there are concerns that bitcoin could continue to fluctuate within a descending channel, potentially leading to a decline in its price to around $65,000.
Beyond the Federal Reserve’s policy decisions, political developments in Washington will play a crucial role in shaping the future of the crypto market in June. With both sides of the U.S. political divide showing increased interest in cryptocurrency ahead of the upcoming election, there is a sense of uncertainty surrounding the regulatory environment. As investors listen closely to campaign messaging and monitor the shifting political landscape, the implications for long-term regulation of the crypto space remain uncertain.
Bitcoin miners are facing increasing challenges in maintaining profitability following the recent halving event. As the time it takes miners to find and process new blocks rises and the network’s hash rate declines, there are concerns that their ability to mine new coins is diminishing. This decline in mining profitability could lead to miners selling off their bitcoin holdings to maintain cash flow, potentially causing a negative cycle in the market. Despite predictions of heavy selling from miners post-halving, there has not been a significant impact on the market yet.
While bitcoin remains a popular investment choice for many traders, the current market conditions suggest that the cryptocurrency may face challenges in the month of June. With regulatory uncertainties, political factors, and mining challenges all impacting the price of bitcoin, investors should proceed with caution and closely monitor market developments in the coming weeks.