Equity market sell-off drags bitcoin below $30,000
07:11, 20 July 2021
Bitcoin (BTC), the world’s leading cryptocurrency dropped below $30,000 on Tuesday morning, losing 6.5% over 24 hours, as of 7:39 BST (UTC+1).
The new fall comes amid a sell-off in the world’s equity markets prompted by renewed concerns that a resurgence of COVID-19 cases could delay the economic recovery and push investors away from riskier assets and towards those perceived to be safer, such as the US dollar and precious metals.
Bitcoin’s price, which more than doubled between January and April, is now at its lowest level since early January and down 54% from its all-time high in mid-April.
The other major cryptocurrencies recorded even steeper falls today. Ethereum was down 8% while binance coin (BNB) was down 12.5% in 24 hours.
Nearing critical support levels
Patrick Heusser, head of trading at Crypto Broker AG in Switzerland, says that both bitcoin and ether are nearing critical support levels at $29,000 for BTC and $1,700 for ETH. He believes that if these levels are broken, bitcoin could see another big drop.
“I am sticking to my call that if we break $29k with good volume, then we can say hello to the low $20k levels,” he said in a comment today.
However, the current trading volumes are still low, which suggests that most bitcoin holders are not willing to give up just yet and are waiting for some positive news.
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Hold vs sell
The low trading volumes indicate that there’s reduced activity by new buyers. The price movements are now largely being determined by the standoff between long-term holders and sellers.
“Long-term holders and bull market HODLers [investors who buy and hold] appear unshaken by volatility and lower prices. The volume of coins held in an illiquid state continues to grow, and the potential supply squeeze is coming from a much higher base than the 2018-19 bear. This demonstrates the remarkable conviction of BTC holders to weather extreme volatility,” on-chain analytics firm Glassnode wrote in its weekly newsletter.
On the bear side, Glassnode notes that the market is trading “at the low end of a high on-chain volume cluster with very little cost basis support between $31.0k and $18.8k.”
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