Bitcoin has been trying to regain its position at the $70,000 zone since the market rejected it over a month ago. For the last many days it has struggled with multiple resistances at various levels. On 29th July, it could finally touch this spot but could not hold it for long. Prices dropped down to $66,500, breaking many support levels and passing all MAs in their path, after facing over 4% rejection. Let’s explore the reasons for this sudden drop and what to expect next.
Multiple Support Factors
There were many factors that helped Bitcoin to climb up all the resistance levels to reach the $70,000 marks after a month. The biggest of all is the speech by former US president Donald Trump during the Bitcoin Conference 2024 in Nashville.
Trump expressed his support for the Bitcoin and crypto ecosystem openly. He promised that he will not sell the Bitcoin the US government has confiscated if he gets elected. Instead he proposed his desire of turning the seized Bitcoin into a strategic reserve. Donal Trump, on multiple occasions, has shared his willingness to make the US the biggest player in Bitcoin. He wants the Bitcoin and the whole crypto ecosystem to flourish in the US.
The Biggest resistance
The $70,000 zone is one of the biggest resistance as it is an old ATH for Bitcoin. According to experts, this would be the biggest challenge for BTC. This level had a lot of sell pressure liquidity, hence, it could not hold the position and got rejected. MA 20 tried to hold the price at around $69,000 however, the intensity of the selling pressure broke it. It even crossed the next support level at $68,000. After this the panic started among traders causing the price to further slip.
US Govt BTC movement
At the same time when BTC was already falling due to high selling pressure, the US government made some movement in their Bitcoin holdings. Arkham’s data shows that they moved 29.8k BTC worth $2.02 billion out of the 183,439 Bitcoins they hold to an unknown address. This brought a new kind of fear to the market. As this news broke, a lot of tweets stating that the US government is planning to sell these BTCs surfaced causing a panic in the market. This resulted in Bitcoin falling to $66,500.
At the time of writing Bitcoin is currently trading at $67,330, however the hourly chart shows a support level of $66,800 is now acting as a resistance and the latest support is 200MA.
What to Expect Next
As of now, the owner of the wallet that received $2.02 Billion worth of Bitcoin from the US govt. is still unknown. Hence, it is almost impossible to state what could be their next move. It is some other government. wallet and they are planning to use this btc for some purpose or it was just a movement, nobody can say that for sure. However, we are sure, some information will surely pop up in the near future. Bitcoin is trying to hold the price right now as the bear power is decreasing. We can only expect, the price will rise again soon as there is a supportive environment being built around the globe for crypto.
