A lot of attention is being given to Bitcoin, but this time not on a positive note, considering its value erased more than 50% of the gains since April. Sellers are now heavily in control and although volatility contracted over the past several weeks, the price action structure continues to be favouring more weakness in the short term.
Bitcoin selling not easing
On June 22nd, 2021, the BTC price dropped below $30,000, erasing all gains for the year. Selling stalled a little below $29,000 and a bounce occurred, yet it did not suffice to generate an improvement in the overall sentiment. The price is now pointing south again, threatening to retest the $30k area once again.
Many of the favourable tailwinds have vanished over the past few months. Now we have more caution when it comes to crypto, on the back of the rising US Dollar. Weakness in the global reserve currency has been a major boost for assets like Bitcoin and now that inflation and interest rate are hiking, prospects are better in the US and the Dollar leads against its peers.
China crackdown in the spotlight
In tandem with a stronger dollar, China continuing on its aggressive path to ban crypto operations inside the country is another reason why Bitcoin has been weakening. Media coverage is not encouraging people to buy more BTC, even though the Chinese regime has been heavily against crypto for a really long time (since 2017) when they banned crypto exchanges and ICOs.
The attention has shifted to cryptocurrency mining and all the fintech companies that are facilitating crypto transactions for Chinese residents. The market did not seem to care about tighter regulation, yet the change in narrative across the Western World has been an incentive to take crypto regulatory pressure more seriously.
Source: https://in.finance.yahoo.com/news/bitcoin-price-hits-time-high-092030589.html
What can investors do?
Current conditions in Bitcoin are extremely challenging for investors, yet they can adapt to falling prices by using derivatives. One of the providers of cryptocurrency trading is Winiford, a platform specialized solely in offering access to a variety of digital assets, including Bitcoin.
Cryptocurrency trading is a more suitable solution, in this case, considering users can even sell short and take advantage of bear markets, like the one still unfolding. A platform like Winiford offers tailored software, professional customer support, and a variety of trading tools customers can use to spot new trading opportunities.
Technical analysis is still being used en masse when trading crypto since it is a viable approach to finding a good entry location and understanding what is the dominant side of the market.
Regardless of when the Bitcoin bear market ends, Winiford and other trading platforms specializing in crypto can provide a safety net and also, a vehicle for new opportunities, even though valuations are weakening.
For the time being, the $30k area seems to be a key support zone for Bitcoin, defended by the buyers several times over the past few weeks. If it fails to hold, that could be an early indicator for more selling, potentially driving the price towards the $25k area.
