Bitcoin Plummets Below $30,000 As Bearish Signals Intensify

Key Points:

• Bitcoin’s price dips below $30,000 due to factors including a possible sell-off of the U.S. gov’s seized Bitcoin stash.
• Independent digital asset analyst says futures prices are showing bearish signals.
• Analyst expects dip to be short-lived and followed by a price correction.

Bitcoin’s price experienced a dip below $30,000 due to several factors influencing the performance of the digital currency.

The price of the world’s largest cryptocurrency fell 0.6% over the past day to $29,855. Despite three key prospects that bulls are focusing on for long-term holding and accumulation, including the Bitcoin halving event, potential approval of spot Bitcoin ETFs, and speculation about a rate cut next year, one analyst believes that downside pressure is being catalyzed by the possible sell-off of the U.S. government’s seized Bitcoin stash.

This possible sell-off of BTC was caused by an announcement on July 12 by the U.S. Department of Justice that stirred speculation by appearing to transfer $300 million in BTC to new addresses in two transactions. Independent digital asset analyst Konstantin Anissimov told The Block that “I think that this price reduction is mostly driven by futures prices showing bearish signals, mostly driven by news the U.S. government is allegedly preparing to sell close to $300 million worth of Bitcoin. I believe the market is expecting this to happen very soon.” He added that “the total daily volume traded in Bitcoin is less than $2 billion right now. My assumption is some of this is wash trading. So, a sell-off of $300 million worth of Bitcoin should and will result in a negative price movement.”

However, the analyst expects any dip to be short-lived and followed by a price correction. While Bitcoin traditionally presents an inverse correlation with the U.S. Dollar Index, it failed to appreciate in the wake of DXY’s recent decline of around 2.3%. “The BTC-DXY relationship will be hard to shake for long, though,” said Noelle Acheson, author of Crypto is Macro Now newsletter. “It’s not just that the U.S. dollar is the denominator in the most-quoted pair for the crypto asset, and when the denominator goes down in value, the ratio goes up, all else being equal, it’s also that a weaker dollar boosts global liquidity by giving U.S. dollar debt holders around the world more room to breathe.”

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