Bitcoin falls below $ 30,000 for the first time in 4 weeks as U.S. stocks wobble

The thorny path that Bitcoin has taken for the past two months continued on July 19 and today. It all started during Monday’s session when Bitcoin price lost $ 31,000, slid to a low of $ 30,400, then plunged to the mid-range $ 29,000 in early July.

BTC / USDT 1 hour chart. Source: TradingView

The entire market continues to face an uphill battle as the exodus of miners from China under pressure has resulted in the fourth consecutive negative correction in Bitcoin mining troubles, the number has almost halved since mid-May.

In the midst of the Bitcoin slump, US stocks also slumped on Monday amid fears that a recovery in Covid cases could slow global economic growth. Sales spiked during the session and the Dow Jones Industrial Average had its worst day since last October. Specifically:

• The Dow fell 725.81 points, or 2.1%, to 33,962.04 on a broad route that sent all 30 members down. The Dow fell 946 points at one point during the session before bouncing back a few points later in the session.
• The S&P 500 indices fell 1.6% to 4,258.49. Energy, finance and industry performed worst.
• The technology-dominated Nasdaq Composite fell 1.1% to 14,274.98, the fifth straight day of decline and its worst streak of losses since October.

Organization of reduced interest

The market-wide decline in May caused a significant drop in interest from institutional investors currently in risk management mode as BTC price struggles to move higher.

Evidence of a decline in interest rates can be found in the market price of the GBTC, which continues to trade at a discount of -11.0% to -15.3%, or in the observation of the net capital flow in the Purpose ETF, which has slowed significantly. Data from Glassnode shows the ETF recorded a net outflow of -90.76 BTC, the highest number since mid-May.

Source: Glassnode

While institutional activity stalled, BTC deposits on the exchanges continued at over 28,700 BTC, the largest inflow in over a month and a half, which happened on July 16.

Source: CryptoQuant

Cash flows into stock exchanges during the consolidation and correction are generally viewed as a negative development, as they can lead to increased sales and short-term price drops.

Glassnode also pointed out that a net inflow of 1,780 BTC to OTC desks in the past two weeks “runs counter to the structural trend in capital outflows since November 2020”.

“It remains to be seen whether this net inflow is a short-term effect or an early sign of a reversal in the supply and demand balance.”

Source: Glassnode

What do analysts say about the Bitcoin price outlook?

Patrick Heusser, Head of Trading at Crypto Finance AG, said he expects a sharp drop towards $ 22,000.

Bitcoin could be vulnerable to a rapid plunge towards $ 20,000 that will “attract many institutional buyers who have been patiently waiting on the sidelines,” said Edwaed Moya, market analyst and senior at Onada.

“If the sell-off in the stock markets increases, Bitcoin and Ethereum will slightly prolong their decline.”

Katie Stockton, founder and managing partner of Fairlead Strategies, says the bitcoin consolidation phase is currently “neutral”. Katie personally believes that “an outbreak is more likely than a breakdown”.

In April, the Bitcoin network was “very active, it wasn’t difficult to support prices above $ 50,000,” said Charles Morris, founder of ByteTree Asset Management. In the past few weeks, however, the network’s activity has plummeted. “It is now equivalent to a bitcoin price of $ 15,000 instead of $ 50,000,” he said.

Annie

Bitcoin magazine

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