Bitcoin Holding $30k During Weekend Sell-Off & Rallying After U.K Regulatory Actions is an Encouraging Change in Market Reaction to Bad News

In our Friday note, we reiterated our long and medium term bullish view on crypto from our Mid-Year 2021 Crypto Outlook call last Wednesday, but discussed how markets could see some weekend volatility and a little protection to manage risk might not hurt.

Crypto markets sold-off a bit further into the weekend on early Saturday morning following news from the U.K Financial Conduct Authority (FCA) that banned certain crypto entities operating illegally, including an affiliate of the prominent crypto exchange Binance (who has since issued their own statement in reaction to the news).

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Source: FCA

Bitcoin again fell again into the $30k rage but managed to hold support and was able to bounce towards the end of the weekend, jumping into the $34k range Sunday evening, which is roughly where we sit now.

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Source: Bloomberg

We think there are two important takeaways from the way Bitcoin reacted this weekend:

  1. This is the fourth time the price has come within the ~$30k range and found support
  2. This weekend’s price action represents a change in the market reactions vs. prior months where negative news had been taking us lower
Prices holding the $30k level again may be a sign that we have in fact found the bottom of this crypto correction around those levels. And pr...
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