Bitcoin(CRYPTO: BTC) traded above the $30,000 mark in the early hours of Wednesday, at $31,983.53, which is 2.87% lower over 24 hours. Here are some factors that give a sense of whether BTC could drop below the psychologically important $30K level.
A Tighter Range: Bitcoin has traded sideways with thin volumes stuck in the $30,000 to $40,000 range for the past eight weeks.
However, the $30,000 level has been defended by buyers until now. “Bitcoin’s consolidation range is getting tighter,” said Arcane Research, as per a CoinDesk report.
Falling Popularity: Bitcoin’s popularity has a question mark attached to it, amid thin volumes on major cryptocurrency exchanges, which have fallenmore than 40% in June. Apart from a seasonal factor, a waning interest can also be attributed to investors who have yet to experience a bear market but was attracted to the cryptocurrency scene due to earlier sky-high valuations, as per Gabor Gurbacs, director of digital assets strategy at VanEck, a global investment manager, as per CNBC.
Fear And Greed: Arcane Research’s “Crypto Fear & Greed Index” assigns “extreme fear” a value of 0 and “extreme greed” a value of 100 was at 21, an indicator of extreme fear. Last week, the index was at “Fear” levels, which indicates increasingly nervous sentiments.
The fear factor was noted by Teddy Vallee, chief investment officer at Pervalle Global who said, “The digital asset ecosystem got punched in the face, so it’s currently up against the ropes versus fighting in the middle of the ring. Typically when you have large sell-offs, participants are quite fearful and pull back their chips,” CNBC reported.
Line In The Sand: Eqonex, a Singapore-based digital assets financial services company that encompasses an eponymous cryptocurrency exchange, said Tuesday that a big push is required to move the markets lower given "we are placed" on the 50-week moving average.
“The disappointment when Apple announced that ithasn't bought $2.5B of Bitcoinis unlikely to be enough, and the rumor creators/spreaders will just swap out 'Apple' for 'Twitter' and carry on the good work,” said the company in a note.
As per Eqonex, the bulls must protect the key level of $28,700. A break below $32,000 would allow bears to “push for a return to support at $29,800.”