Bitcoin (BTC) rallied to a major price resistance early Tuesday as Hong Kong said individual investors could trade the digital asset from June 1.
The Hong Kong Securities and Futures Commission (SFC) announced that it will accept applications from exchanges to offer cryptocurrency trading to retail investors from June 1, adding that approved tokens need a 12-month track record and significant market capitalization.The SFC said that registered exchanges would be prohibited from offering stablecoins and interest-bearing instruments.
This announcement is in line with long-standing expectations that developments in Asia will spur the next cryptocurrency bull run and contrasts with the lack of regularity in the West, particularly in the United States.
Bitcoin picked up a bid during the Asian hours and rose more than 2% to $27,500, validating the previous support-turned-resistance of the horizontal trend line that connects the first and second bottom of a head and shoulders (H&S) pattern.The cryptocurrency fell below the trend line early this month, confirming the collapse of H&S and opening the doors for a deeper slide towards $25,000.
“This appears to be a pip-based non-macro move, and the timing coincides with the news that Hong Kong will allow retail trading of BTC and ETH on licensed digital asset platforms from June 1,” Noel Acheson, author of the Crypto Is Macro Now newsletter., in the Tuesday edition.“This isn’t a complete surprise – the judgment and timing were largely predictable.But the confirmation matters more in a lackluster market with headwinds coming from other vectors,” Atchison added.
Per Acheson, Hong Kong’s decision to greenlight cryptocurrency trading to retail investors does not mean that there will be a flood of demand for cryptocurrencies, as it is likely that local traders are already accessing the market through offshore venues.However, the announcement is “a welcome reminder that the cryptocurrency adoption pool is likely to grow exponentially over the next year and beyond,” Atchison noted.
Bitcoin needs to clear the H&S trendline resistance and the 20-day simple moving average at $27,500 to confirm an upward recovery, according to Canadian digital asset liquidity provider Secure Digital Markets.
As long as prices stay below the neckline [horizontal trendline] Who is this [H&S] In addition to the 20-day moving average, we should expect a further decline to $25,250 and possibly $24,000, analysts wrote there.
Bitcoin’s short-term outlook also depends on the ongoing drama of the US debt ceiling and the path of the dollar index.Treasury Secretary Janet Yellen has warned that the government will run out of money in early June if a debt deal is not reached, opening the door to what many say would be a catastrophic default.
Some analysts said that a successful resolution to the debt ceiling drama could see the Treasury Department suck liquidity from the market and put downward pressure on Bitcoin.
Finally, bond yields are rising in a sign of investors’ reassessment of the possibility of the Federal Reserve continuing its campaign to raise interest rates and keep borrowing costs higher for a while longer.
The yield on the 10-year US Treasury rose to more than a two-month high of 3.75% at the time of writing, while the two-year yield jumped to 4.4%, the highest since March 13.Cryptocurrencies and zero-yield assets such as gold..