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Bitcoin hit a 12-month peak of $31,500 on July 6, only to reverse direction soon after. Market analysts are emphasizing the importance of maintaining the $30,000 support level, warning that a breach could allow sellers to assert control and ramp up selling pressure.
Rising Whale Interest Despite Falling Bitcoin Price
Crypto analysis platform Glassnode reports that large Bitcoin investors, popularly known as ‘whales’, continue buying BTC despite its struggle to maintain an upward price trend. Moreover, these whales hesitate to move their assets to exchanges, with cold storage emerging as the preferred choice.
Investors are cautious about holding their Bitcoins on crypto exchanges amid regulatory pressure. Whales are expected to continue this trend while increasing their assets, which suggests a likely decrease in Bitcoin supply on exchanges. This could potentially signal a significant price increase.
Why Is Bitcoin’s Price Falling?
The largest cryptocurrency is having a rough week amidst significant macroeconomic data releases. Factors such as the Federal Open Market Committee (FOMC) minutes revealing the Fed’s plans to hike interest rates, and the June ADP Employment Change coming in significantly above expectations, have put pressure on Bitcoin.
The release of the ISM Manufacturing Index for June, which climbed to 53.9, surpassing expectations, also reinforced the selling pressure. The current flow of data supports the Fed’s justification for further interest rate hikes. Increasing concerns that the Fed’s actions might plunge the American economy into a severe recession are also adding pressure on risky assets like Bitcoin.
What’s Next for Bitcoin?
The BTC price had been moving upward for a while, driven by a number of large asset management firms, including BlackRock, the world’s largest asset manager, applying for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC). This uptick was particularly fueled by investors’ belief that the SEC would greenlight a spot Bitcoin ETF in the U.S., especially after BlackRock CEO Larry Fink promised to work hand-in-hand with regulators.
However, the confidence of investors in a short-term rise to $35,000 and even $38,000 if the $31,000 resistance, believed to have weakened with ongoing attempts, is broken has been shattered, leading to a downturn.
After a significant ADP data release, Bitcoin fell to $29,745 but managed to climb back above $30,000, currently trading at $30,088. Support from the 100-day Exponential Moving Average (EMA) (blue line) has reinforced the $30,000 support level.
According to closely followed crypto analyst Captain Faibik, Bitcoin is forming a rectangle pattern on the daily timeframe. Faibik sees this as a bullish pattern, stating that the $31,125 level must be surpassed to confirm the breakout. The analyst predicts that with the support of increasing volume, the price could climb above $33,000 if the breakout is confirmed.
