Bitcoin has 3 months from May to June to make up for losses, but how?
Bitcoin fell to $ 28,000 just last week when a flurry of opinions and predictions flooded the room. FUD (Fear, Uncertainty, Doubt) is evident among retail investors as sentiment dips to previous lows from early 2020.
However, the price began to break out in the past few days as Bitcoin surged back above $ 30,000. The market as a whole faced a brutal second quarter of 2021, but there are signs of a fresh start for Bitcoin in the third quarter of 2021.
Why is $ 34,500 suddenly important?
BTC / USD | Source: Tradingview
Much has been said about the $ 30,000 level in the past few weeks, with some analysts claiming the range is important for Bitcoin to hold its own. Instead of the $ 30,000 mark (the currently established demand zone), however, $ 34,500 might make more sense given the current market structure.
Since May 17, Bitcoin has attempted to close above $ 34,500 for six straight weeks, despite lows of $ 29,800 and $ 28,000 during that time. Bitcoin has consolidated below the $ 33,000 mark in the past 2 weeks, but the weekly close remains above $ 34,500. This suggests that institutions are buying heavily in this area.
Institutions rarely chase price and often wait for corrections based on liquidity pool data. Retailers are drawn to FOMO and are unaware of the huge capital orders under current prices. The fact that Bitcoin continued to close above $ 34,500 while the demand zone was retested a few times shows strong institutional buying after the May 19th crash.
Institutions not currently buying?
The market appears to be less interested in Bitcoin due to the 50% price drop, but Microstrategy continues to accumulate more BTC in its portfolio while ARK Investments adds more GBTC stocks to its account.
Speaking of grayscale, last week’s decline is due to the large number of stocks that have been unlocked on the platform. Barry Silbert, CEO of the Digital Currency Group, which manages Grayscale tweets on June 21, 2021:
“It’s going to be an unpredictable and dangerous week.”
Less than 24 hours after the above tweet, the BTC price dropped to ~ $ 28,900. According to the data, nearly 30,000 BTC were unlocked in GBTC shares from June 21-23. The activation of GBTC shares means that investors who have invested in Grayscale’s investment vehicle since mid-January can benefit after the first six-month lock-up period has been completed.
Plus the skew. Data analysis platform said:
“Private positions in GBTC have been discontinued since March, which means that according to the 6-month blocking rule after September there are no more” activations “.”
Spread Fee GBTC | Source: Skew
Logically, this allows BTC to have a 3 month buffer to stabilize and regain an important margin in the market before showing another strong rally later in the year.
Unlock Bitcoin Trust in Grayscale | Source: bybt.com
On the flip side, it’s important to keep this in mind: the last massive unlock of 16,200 BTC shares will be activated on July 18th. However, in the long run, institutional trading can return if the price moves above the chart.
Bitcoin goes through a longer cooling phase
Well-known analyst and trader Cantering Clark believes Bitcoin will have to go through an extended cool down before it can resume its historic rally.
After a strong rally to highs of $ 64,804, Bitcoin corrected sharply 50% in May after a wave of scandals, including concerns over China cracking down on miners and Tesla suspending BTC payments.
Clark was galloping share Market outlook with 59,100 followers that predicts a long way to go before Bitcoin hits a new all-time high.
“We are currently in a bear market. I think BTC will see new highs again. But what I want to emphasize is that it is unreasonable to expect these highs to happen anytime soon. The only possibility is that there is a big macro catalyst …
Bitcoin has had a good year with convincing gains from its March 2020 lows.
And the current problem has only been occurring for more than 1 month.
Some of you think the rally will continue from here. No wait. It will take more time. “
Despite declining market sentiment, Cantering Clark shares some reasons why higher prices could arise.
“Just an opinion worth considering.
– Bitcoin is currently 55% below its high.
– Shorts pay an exorbitant amount (annually) to hold their position.
– The market looks uniformly bearish
– There has been a lot of FUD lately and we still can’t get rid of it.
You can see the BTC price here.
Disclaimer of liability: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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According to AZCoin News