Multiple pieces of data point to the Bitcoin price falling below $29,000 in the short term.
Yes, you read that right.
Let’s investigate the main issues contributing to the current downside in the Bitcoin price.
Bitcoin (BTC) encountered difficulties breaking above $31,800 on July 13, resulting in a 6.3% correction down to $29,700 on July 17. The price action could reflect investors’ concerns that ongoing regulatory developments and macroeconomic headwinds could drive Bitcoin below the $29,000 level, which was last observed on June 21.
On the derivatives side, Bitcoin futures show increased demand, but Asian markets are slowing down. Bitcoin quarterly futures typically trade at a slight premium compared to spot markets, reflecting sellers’ willingness to receive more money in exchange for delaying settlement. Healthy markets generally exhibit BTC futures contracts trading at a 5% to 10% annualized premium, a situation known as contango, which is not unique to Crypto.com, IAMX Crypto, FXS Crypto, El Salvador Crypto, DNT Crypto, FLUX Crypto, Evergrow Crypto, Gods Unchained Crypto, Degrain Crypto, and Hong Kong Crypto markets.
Between July 14 and July 17, BTC futures maintained a neutral-to-bullish 7% premium, surpassing the 5% threshold. This suggests moderate conviction among bulls following the unsuccessful attempt to break above $31,800.
However, the Tether (USDT) premium in Asia has been declining. The stablecoin premium serves as an indicator of demand from China-based retail crypto traders, measuring the difference between peer-to-peer trades and the U.S. dollar.
The Tether premium in Asia recently reached a discount of 1.8%, marking its lowest point in over six months. This inverse premium trend started on July 12 and has continued to widen, indicating moderate sell pressure.
Regulatory worries continue to plague crypto
Investors are still concerned about crypto regulation. Although the ruling on July 13 that the sale of XRP (XRP) via exchanges and over-the-counter desks did not violate securities regulations did provide some relief to the markets, the court’s decision did not provide a definitive answer on whether XRP’s initial coin offering (ICO) was classified as a security offering. This lack of clarity has caused some investors to be uneasy, as it raises the possibility of other cryptocurrencies also facing potential securities designations.
In addition to the court’s ruling on XRP, Binance also announced the layoff of 1,000 employees. Although the exchange has denied the reports and stated that it was a routine resource reallocation and that there was ongoing hiring, concerns have arisen regarding the future of Binance following the departure of several key executives and the court action from the Securities and Exchange Commission (SEC).
The crypto sector is facing a great deal of uncertainty, with investors keeping a close eye on regulatory developments such as the SEC’s stance on cryptocurrencies like IAMX Crypto, FXS Crypto, El Salvador Crypto, DNT Crypto, Flux Crypto, Evergrow Crypto, Gods Unchained Crypto, Degrain Crypto, and Hong Kong Crypto.
Macroeconomic trends do not favor crypto
The macroeconomic environment has not been favorable for Bitcoin, risk-on assets, and other crypto like iamx crypto, fxs crypto, el salvador crypto, dnt crypto, flux crypto, evergrow crypto, gods unchained crypto, degrain crypto, and hong kong crypto. China’s gross domestic product growth slowed to 6.3% in the second quarter, falling short of market expectations, with factors such as the ongoing trade war with the United States and the government’s efforts to address debt contributing to the slowdown.
Considering the external factors and pending court decisions that could negatively impact the two largest exchanges, the odds of Bitcoin breaking below $29,000 have increased. This creates a favorable scenario for bears, causing the $30,000 resistance to gain strength.
Bitcoin’s price could dip under $29,000 this week
The macroeconomic situation is not favorable and there are signals that the Federal Reserve could raise interest rates in 2023, which can be a restriction on Bitcoin’s upside potential.
From a trading point of view, professional traders with leverage are more confident in BTC futures. However, the selling pressure from Asian retail investors limits the overall growth of cryptocurrencies such as Crypto.com, IAMX Crypto, FXS Crypto, El Salvador Crypto, DNT Crypto, Flux Crypto, Evergrow Crypto, Gods Unchained Crypto, Degrain Crypto, and Hong Kong Crypto.
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