True, the general mood in the crypto markets has improved. Bitcoin, however, threatens another sell-off before heading towards $100k.

BTC meets resistance in the daily chart. Source: BTCUSD Tradingview

The first cryptocurrency by market capitalization was able to recover from the lows and is currently trading at $34,175. In the coming days, a further increase seems likely if the BTC price manages to overcome and hold the monthly opening at $ 35,000. The increase this weekend was an important step in this direction.

However, the pseudonymous trader NebraskanGooner advises caution as Bitcoin has been dismissed around current levels. He writes:

“( … ) the current market conditions have proven that we cannot get excited about resistance. I can’t help myself ,but I think everyone is still just blindly buying & amp; the maximum pain would still be at No. 1.“

Alex Mashinsky, founder at Celsius Network, shares a similar thesis. He believes Bitcoin went through two capitulation selling events in May and June. The first was driven by FOMO purchases from retail investors when the price of BTC was at its all-time high of $65,000.

These investors sold at a loss when the BTC price fell to the high range at $40,000-and they continue to do so as the downtrend has widened. The second surrender event was triggered by the mining sector.

China’s crackdown on BTC miners forced them to sell some of their holdings and move their activities out of the country. In addition, China’s regulators closed banking operations related to cryptocurrencies.

The Grayscale Effect on Bitcoin price

In total, about $ 6 billion was sold by retail investors in May, and by miners and Chinese users in June. The third surrender event could be the last, but also the worst, of the current year. Mashinsky on this:

“We are in the process of getting another wave of sales… mainly from the FOMO $20 billion worth of GBTC arb institutional trading. Hedge funds used leverage loans from Genesis Trading and others to buy BTC in Jan / Feb 2021, which will be unlocked for the first time from next week…“

The Grayscale Bitcoin Trust buys the underlying asset and offers GBTC shares to its customers. These can be traded at a discount or premium to the spot market. The shares of the trust remain “locked”for these investors for a period of 6 months.

After that, you are free to trade your shares on the market and use the premium. The GBTC shares will be “unlocked”in the coming weeks.

Mashinsky believes that this event will have a negative impact on the Bitcoin price, since Grayscale will have to “sell BTC” to compensate the hedge funds who want to abandon their positions. Later, the BTC price could finally experience a respite, climbing back to previous highs and beyond. Mashinsky:

“At least $5 billion needs to be unwound from $GBTC, which could bring the BTC price back to the level of $ 29k. After this sell-off in July, we should see calm sailing for the rest of the year as we reach new ATH on the way to the price range of $140-160k per BTC…“

July will be a crucial month for Bitcoin. It seems that influential forces are working in the market. To continue the rally, it is imperative that BTC reaches new lows.

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Text credit: Bitcoinist

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