Bitcoin Price and Falling Markets

Jul 05, 2016 at 13:43 // Price

Yesterday was relatively quiet for financial markets due to the US Independence Day celebration. Fears of serious repercussions of Brexit are gradually weakening, and the Bitcoin price briefly found peace in the range of $665 - $680.

However, the uncertainty in global markets persists and traders expect the central banks of the EU, UK and Japan to soften monetary policy, which could support the economy of these countries as well.

Gold, silver and banking

In June, the most profitable investments were gold and silver. After the announcement of the first results of the referendum in the UK the price of gold reached $1,350 per ounce. Gold has always been a defensive asset, and the growth of its value may continue in July. The underestimation of silver in relation to gold in time of Brexit may also contribute to the growth of its value.

For now, investors continue to sell shares, fearing further reduction in prices. In particular, assets from the banking sector held a bargain sale. The Italian Government has refused to solve the problem of credit institutions at the expense of the state or provide additional liquidity to the banks. This is an alarming signal. As we remember, the world's crises always start with the banking sector. In this regard, we should expect a reduction in the exchange rates of EUR/USD. To date, the price of the currency pair EUR/USD is $1.1134.

World financial markets

These are not the best times for the UK either. The PMI Construction report for June, which was recently published, speaks about the declining of its index to the lowest level of the past 6-7 years. The British Pound also fell to $1.3253, and this is not the limit. Today a new report on the PMI for the services sector is going to be published. The forecast for this indicator is positive, however, it will not be able to improve the macro-economic climate in the UK soon.

In Japan, no publication of important macro-economic statistics is expected today. However, while there is no certainty on the consequences of Brexit, the Japanese Yen continues to grow. Exchange rates of USD/JPY fell from $102.80 to $102.10 per day.

As you can see, the situation on world markets will still be unstable. Bitcoin in these conditions at the same time can be considered as a risky asset and as an asset of refuge. A confirmation of this is the sideways trend that we have seen for several days. This suggests that investors, although not in a hurry to buy Bitcoin, do not sell it either. We may expect a halving of mining rewards for  BTC will give it a new impetus for price changes. What do you think? 

This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell Bitcoins

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