Why Bitcoin Could Take Another Bite At $17K
20 Juni 2022 - 04:24PM
NEWSBTC
Bitcoin is back above $20,000 after seeing some relief during the
weekend. The number one crypto by market cap dropped below its 2017
all-time high as selling pressure increased driven by the current
macro-economic environment. Related Reading | Bitcoin
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At the time of writing, Bitcoin (BTC) trades at $20,500 with a 6%
profit in the last 24 hours. The last seven days record a different
story with a 24% loss. Former BitMEX CEO Arthur Hayes claims an
institutional forced seller triggered the increase in selling
pressure. An entity that was forced to liquidate its positions as
BTC’s price trended further downside. Hayes believes that Canada’s
Bitcoin Purpose Exchange Traded Fund (ETF) was potentially
responsible for the downside price action. The investment vehicle
is settled by physical BTC and, according to Purpose, when a client
buys the ETF, they are buying “real Bitcoin”. The former BitMEX CEO
claimed he is unfamiliar with this ETF’s redemption process.
However, the investment vehicle appears to have dumped 24,500 BTC
into the market, as seen below. This represents almost 50% of the
ETF’s assets, if the BTC was sold in a rush, it seems logical that
Bitcoin lost support at around $20,000 and was forced to trade
lower with the rest of the crypto market. Buyers showed up and
absorbed the downside price action. This enabled Bitcoin to reclaim
the $20,000 area and showed that Bitcoin gets bough quickly below
these levels. Hayes said the following about the conditions that
took BTC’s price to fresh lows, and why it experienced relief: Over
the weekend, while the fiat rails are closed, $BTC dropped to a low
of $17,600 down almost 20% from Friday on good volume. Smells like
a forced seller triggered a run-on stops. After the sellers dumped
their bags, the market quickly rallied on low volume. Why Bitcoin
Could See More Pain The initial reaction to the downside pressure
was good, but as Hayes explained, it happened during a low weekend
with low volume across exchange platforms. The crypto market could
see BTC’s price taking another swing at the lows. The former CEO
said: Given the poor state of risk management by cryptocurrency
lenders and over generous lending terms, expect more pockets of
forced selling of $BTC and $ETH as the market figures out who is
swimming naked. Related Reading | TA: Bitcoin Recovery Stalls
Near Key Juncture, Key Resistance Intact As this structure, which
contributes to spikes in selling pressure, remains intact bears
could continue pushing B’C’s price down. In the meantime, long-term
players have an opportunity to increase their holdings, Hayes
concluded: Is it over yet … I don’t know. But for those skilled
knife catchers, there may yet be additional opportunities to buy
coin from those who must whack every bid no matter the price.
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