Bitcoin today unexpectedly broke through the $ 35,000 support level, losing 5% of its value. Should we be afraid of even greater decline?
The past work week promised a short-term bullish move for Bitcoin. Smoothly rising, the leading crypto asset rested at $ 41,375 and then began to decline. Many analysts were convinced that it was necessary to prepare for the next step on the road to $ 50,000, but Bitcoin did n’t follow their opinion and began to lose value, returning to the flow of a bearish trend.
In the following days, as we recall, the cryptocurrency gradually fell below the marks, stopping at yesterday’s low – just below $ 35,000. This means that Bitcoin lost more than $ 6,000 in a few days.
The overall picture has not changed – after the huge liquidation collapse on May 19, the price of the leading asset is trading within a volatile zone between $ 30 and 42 thousand.
Today the bulls tried to defend the support of $ 35,000. However, this level has also collapsed, and BTC is trading around $ 34,900.
Low Bitcoin trading volume
It is important to note that the recent fall in prices is taking place at lower trading volumes compared to the May trading volume levels.
According to the leading exchanges, the commutative volume has been stable below 50,000 BTC since the beginning of June. This is much lower than the ~ 150,000 BTC level that was common during the mid-May surrender. Low volume means lack of interest and instability of the market, which can easily change the direction of its movement.
As for the possible development of events due to the recent break below $ 34,000: Bitcoin, having succumbed to the flow, could easily go to test another lower range of the mid-term trading zone, or, in other words, drop to $ 30,000.
As mentioned above, BTC has been trading in a wide trading range from $ 30,000 to $ 42,000 at the moment for a total of 32 days. The flagship cryptocurrency is likely to remain volatile until a clear breakout of this range occurs.
Grayscale Trust shares unlock
Another factor that can influence the Bitcoin market is the upcoming unblocking of a large batch of shares of the Grayscale trust. After a half-year waiting period, such shares become available for sale to their institutional investors. On July 19, shares for 16,000 BTC ($ 535 million) are to be unlocked, which will be the largest value for a single day. In the past, such events have often coincided with periods of increased market volatility.
Although for the popular trader under the pseudonym “loomdart”, it nevertheless offers a chance for the selling pressure to stabilize afterwards, paving the way for the BTC bulls. He noted that this will provide a refreshing counterbalance to the overall bearish picture in institutional markets, where open interest in bitcoin futures has dropped significantly from what it was before the May drop to $ 30,000.