Bitcoin Price Drops Below $ 34,000 As Grayscale’s Big BTC “Unlocking” Day Approaches
The downside volatility hit the market on Sunday, as traders argue that most of the decline is over. Bitcoin (BTC) fell to local lows of $ 33,750 on June 20, as fears over weak support levels proved well founded.
Data from Cointelegraph Markets Pro and TradingView showed that the BTC / USD pair quickly fell below $ 34,000 on Sunday after some choppy behavior at the start of the weekend. The decline from resistance near $ 40,000 continued to unfold, with low volumes highlighting little interest in protecting price action well above $ 30,000.
Binance order book data confirmed this on the day, with sellers eradicating a major buy wall above $ 36,500 to leave the next significant support level at the $ 31,000 level. Among traders, the topic of conversation mainly revolved around the so-called “death crossover” on the daily and hourly charts of the BTC / USD pair that occurred on Friday. This refers to the 50-day moving average exceeding the 200-day moving average, and is traditionally considered a bad omen for an asset’s price stability.
Historically, not all death crosses have resulted in losses, as Cointelegraph reported, some are followed by bullish phases. “A death cross is overrated,” summed up popular trader “Crypto Ed” earlier in the week.
“All it tells you is that you are too late to sell short. Most of the downside has already occurred before the crossover.” In another comment, Adam Back, CEO of Blockstream, also criticized Twitter users for the negative bias that is given to death crosses.
However, at press time, Bitcoin was trading 5% lower on the day, while three-day losses totaled more than 14%.
Liquidations multiplied on exchanges, with nearly $ 150 million in positions eliminated in a single hour after a sudden drop of about $ 800.
Investors in Grayscale have a selling opportunity
Another theory about price direction involved an imminent “unlock” phase at institutional investment giant Grayscale.
As Cointelegraph previously noted, a large amount of investor funds will be released in the coming weeks after a 6-month lock-in period, with the potential for selling pressure to increase as accredited investors will try to offset some of it. of your losses (realized after selling your GBTC shares) by selling BTC on the spot market.
Thereafter, on the contrary, there should be a significant lack of activity from sellers.
Fundamentals see increasing pullback
A look at the fundamentals of the network, meanwhile, is an additional reason for concern. The hash rate, which is already in flux due to changes in the distribution of miners, fell below 100 exahashes per second (EH / s), having peaked at 168 EH / s.
The difficulty, after two consecutive downward adjustments, was heading for a third downward leg of around 9.7% in the next adjustment, about nine days from now.
The last time Bitcoin saw three downside difficulty adjustments in a row was during the capitulation phase of the previous bear market in late 2018.
Other estimates, although not exact, also describe the downward trend of the hash rate.
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