The markets are officially entering summer, but Bitcoin could be in for a June downturn. The flagship cryptocurrency gained 13% in May, its eighth monthly gain in the past nine months and its best month since a 44% surge in February, according to Coin Metrics. That’s thanks to an Ethereum-led rally last week ahead of the SEC’s approval to allow an Ethereum ETF to be listed in the U.S., when Ethereum surged 20% in two days. Aspiring Ethereum ETF sponsors are now required to submit an S-1 registration form for each fund. Until then, there are no clear catalysts for cryptocurrencies, with Bitcoin ETFs and halvings a thing of the past. Antoni Trenchev said: “Once these new products receive approval from the SEC, which could be as soon as late June, you can expect them to become popular for Ethereum and the broader altcoin space. Catalysts, Bitcoin will follow BTC.CM= 3M mountain Bitcoin has been trading in a tight range since its record retreat in March “Bitcoin has been little changed over the past three months, more of the same. Not necessarily a bad thing, as long, dreary periods of consolidation often precede sharp moves – just look at the last year of the halving in 2020, where Bitcoin stagnated for five months before explosively rising. Bitcoin has gained $5,400, or 8.7%, over the past three months. June looks shaky for Bitcoin — the cryptocurrency has averaged returns of just 0.25% over the past 10 years, according to CoinGlass. Trenchev noted that returns were hurt by two particularly bad years, 2022 and 2013. After the central bank’s preferred inflation indicator was released on Friday, the personal consumption expenditures price index rose 0.2% in April, in line with expectations. Therefore, “Bitcoin may continue to fluctuate within the downward channel,” said Yuya Hasekawa, a cryptocurrency market analyst at Japanese Bitcoin exchange Bitbank. Additionally, “Bitcoin could quickly give back about half of its gains over the past two weeks and fall to around $65,000.” Trenchev said that in addition to Fed policy, Washington “will continue to be the center of the cryptocurrency world in June.” Investors are closely monitoring the U.S. presidential campaign after the SEC’s embrace of an Ethereum ETF highlighted the changing political fortunes of cryptocurrencies. “Last month, political divisions in the U.S. heated up toward cryptocurrencies ahead of the U.S. election, something that is unlikely to happen,” Trenchev said. “Watching this narrative continue to play out in June will be a challenge. A fascinating movement, and one with huge implications for the long-term regulation of the space.” Bitcoin miners in trouble after halving Elsewhere, Bitcoin prices may come under some pressure from miner selling. Hasegawa said the average time it takes for miners to find and process new blocks is rising, while the network’s hash rate – the combined computing power miners need to mine Bitcoin and process network transactions – is declining. This suggests that their profitability is waning as their ability to mine new coins diminishes. “This shows that the profitability of Bitcoin mining is declining and miners are struggling to mine,” Hasegawa said. “If the price continues to decline, they may have to sell their Bitcoin holdings to (maintain) cash flow, which It could lead to a vicious cycle.” Market observers expect this to happen after the Bitcoin halving in April, which drastically cuts a key source of income for Bitcoin miners – block rewards. Julio Moreno, head of research at CryptoQuant, attributes their current woes to the drop in transaction fees following the halving. Still, miners haven’t sold off in large numbers, he said.
