After a firm close higher last week, Bitcoin appears to be disintegrating at spot rates. Sellers have reversed gains, and the coin is in the worrying territory, trending below the $20k level.
Even though there is optimism, traders are overly apprehensive, keeping their cards close. From the daily chart, sellers are in control as prices are conspicuously limited below the 20-day moving average.
At the same time, the retracement from recent highs is with high trading volumes suggesting bear participation. Accordingly, while traders expect a recovery, the odds of BTC slumping even lower to register new 2022 lows are higher.
Grayscale Investment’s Bitcoin ETF Application Denied
The sell-off could be due to several factors, of which the recent announcement by Grayscale Investment could be one of the biggest. On June 29, Grayscale, a digital asset management firm, said the U.S. Securities and Exchange Commission (SEC) had denied their application to convert their Bitcoin trust into a “pure” Bitcoin ETF.
This was a big blow for whales and traders who had anticipated a recovery should the agency approve Grayscale Investment’s application.
It should be noted that the Grayscale Bitcoin Trust, GBTC, is the world’s largest BTC fund. The instrument is currently trading at a discount and will remain so, in the days ahead, until the market recovers.
Besides, crypto and the financial market are under pressure as inflation in Europe and the U.S. remains high. The FED will continue unleashing all tools under their control, including further raising rates. Their move will, as observed in recent months, force the stock and crypto markets even lower.
Bitcoin Price Analysis
The inability of bulls to print higher and break above the $22k resistance line tilted price action in the line of bears. So far, BTC prices are dropping as bears step up, reading from expanding trading volumes from mid this week.
Buyers didn’t break above the 78.6 percent Fibonacci retracement level of the June 2022 high low points to strong bear momentum. If buyers stood a chance, a decent reaction rate was at the 61.8 percent retracement level at around $23k.
Considering the intense liquidation pressure, aggressive traders may unload on every attempt higher in lower time frames targeting 2022 lows at around $17.6k. Further losses could see BTC crumble to retest $17k, the 78.6 percent Fibonacci retracement level of the 2019 to 2022 trade range.
Technical charts courtesy of Trading View.
Disclaimer: Opinions expressed are not investment advice. Do your research.
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