The crypto market is possibly in a slightly nervy state after two days of red price action which brought bitcoin back down to support at around $64,000. With the Grayscale ETF still dumping $BTC onto the market, and the US government possibly about to sell a further $2 billion in $BTC, will the current price rebound last?
After a monthly close well above $69,000, it might have been expected that the $BTC price continue on its inexorable journey upwards. However, some strong selling days out of the Grayscale ETF (GBTC) are continuing to dampen the weaker buying of the other 9 Spot Bitcoin ETFs.
US government about to sell?
Also, with the US government having moved a massive $2.1 billion in $BTC onto the Coinbase exchange just recently, this potential dumpage could further affect the $BTC price.
The US government’s move at this particular time is perhaps in order to seize an opportunity when $BTC is weaker, and try to push the price down past a critical level. Of course, this is only sheer speculation, and based on the Biden administration’s dislike of the crypto industry.
That said, malicious or otherwise, the US government selling another part of its Silk Road haul might be a rather naive move when one looks ahead into a possibly dominant future for bitcoin, where even nation states need to take a position.
Mr 100 hoovers up whole daily issuance of $BTC
On the other side of the coin, one entity that is really upping his buying spree is Mr 100. Named for his/her/their usual buying of bitcoin in 100 BTC chunks, Mr 100 bought 1,256 BTC in 36 hours as of Tuesday. Given that only 900 BTC are mined every day, just one player buying practically all of this in a short period of time gives one pause for thought, and shines a light on just how misguided the US government is for gradually selling its huge position.
$BTC support holding?
Source: Coingecko/Trading View
Looking at the $BTC price on the daily time frame, it can be seen that the price has fallen through the trend line and is taking hold below. The support below has so far held though, and the CME gap at this level has all but been closed.
It just remains to be seen if the daily candle close will be below the trend line, although the horizontal support is more important. On the shorter time frames the Stochastic RSI momentum indicator is resetting at the bottom, and the daily is on its way down, signalling that upside momentum could be kicking in soon.
Source: Coingecko/Trading View
Weekly close will give clearer guide
Zooming out into the weekly time frame, things usually always look much cleaner, and it can be seen that $BTC has confirmed support at $64,000, but is still deciding whether to drop support at $67,000, and also the support trend line.
If $BTC can reverse back above $67,000 by the end of the week this would be extremely bullish. The close of this week’s price action on Sunday will be incredibly important for giving a good idea as to whether the $BTC rally will continue, or whether a deeper correction is still to come.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
