In early April, the price of bitcoin started to rally after the tax season in the United States ended. Traders believed that the demand for bitcoin and other cryptocurrencies would increase as Americans returned to the market. The price managed to rise from $6,400 and reached a high of $9,700 in late April. In May, the price fell from over $9,000 and reached a monthly low of $6940. This month, the BTC/USD pair has moved sideways in a narrow range.
Yesterday, the price of a bitcoin dropped after bearish statements by Jim Chanos. Jim is the founder of a hedge fund known as Kynikos Associates. He is one of the best-known short sellers in the market renowned for placing a bet that Enron would collapse. Enron was a Texas-based natural gas trading company, once valued at more than $70 billion. It collapsed in 2001.
Sharing his crypto-related thoughts with the Institute of New Economic Thinking, Chanos said that bitcoin and other cryptocurrencies would essentially be the last thing people relied on in the event of a crisis. He explained that “if the grid goes down,” bitcoin would not be a store of value in the event of a mass disaster. As a currency, he argued that bitcoin was unreliable in that it is more expensive than fiat currencies and is not widely accepted by physical and online retailers.
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The BTC/USD pair is currently trading at $7,540. The price is slightly higher than the one-month and two-month simple moving average. Its RSI is currently at 50. The price is slightly below the 38.2% Fibonacci Retracement level. If the pair breaks out to the upside, it will likely test the 50% Fibonacci retracement level at $8070.