China’s aggression to Bitcoin has lead to its worst month in years
Despite a minor recovery, BTC is still showcasing weekly losses in excess of 15%.
- Experts believe that China's ongoing crackdown of its crypto-mining market may be causing the ongoing volatility.
- In order for Bitcoin to maintain positive upward momentum, it needs to stay clear above its all important support level of AU $40,500.
- For the sixth week running, many prominent financial institutions have continued to offload their BTC.
Crypto investors worldwide have been on the edge of their seats over the last 72-odd hours thanks to Bitcoin showcasing insane levels of volatility, taking the premier digital asset to a relative low of AU $38,700, albeit briefly. Since then BTC has forged a strong comeback, with the currency's value rising by over 14% in a matter of a few hours. At press time, the flagship crypto is trading at AU $45,000.
To gain a better overview of the situation, Finder spoke with Gregory Klumov, CEO of stablecoin platform Stasis, who pointed out that the reasons for the ongoing market slide are manifold, explaining:
"The non-stop Chinese crackdown on Bitcoin has hampered the asset's growth momentum immensely. Plus miners have started to hedge their assets and hashrate levels have dropped significantly. Lastly, some market participants have started to leave the room because they don't see any real positive indicators suggesting future market growth."
On a more technical note, Victor Kochetov, CEO of Malta-based cryptocurrency exchange Kyrrex, noted that as per his company's research data, it is important that Bitcoin continue to stay above its all important support level of US $40,500. Also, taking into consideration the prevailing bearish market, Kochetov believes that there is a real chance that BTC may move down to around AU $28,000 - AU $30,000. "This level can be reached before the 5th of July", he added.
Lastly, Kochetov is of the opinion that a price range of US $35,798 - US $36,146 is a good resistance level for BTC. "Before the 26th of this month, we are more likely to reach the level of 200% of the target mark of this model, namely US $27,715", he closed out by saying.
Bitcoin records worst quarterly performance since 2018
As per data made available by crypto data aggregator Skew, Bitcoin is all set to record its worst ever quarterly showing in nearly three years. Not only that, if the ongoing turbulence persists, it is estimated that BTC's Q2 2021 performance will be its second worst showing since the start of 2014.
— skew (@skewdotcom) June 22, 2021
On a technical note, we can see that for the current financial quarter, Bitcoin has lost nearly 45% of its value, which is just 5% shy of the value reached in Q1 2018 when the premier cryptocurrency saw its price dip by a staggering 50% within a matter of just 90 days.
Is institutional interest regarding BTC waning?
If CoinShares' latest weekly report is to be believed, a growing list of institutional investors have continued to offload their Bitcoin for more than six weeks running. As a result, a large number of BTC-tracking investment products have witnessed monetary outflows exceeding $89 over the last seven days.
That being said, the study does note that many multi-asset products have attracted massive monetary inflows (estimated to be worth AU $13.25 million) along with other projects like Polkadot (AU $1.8 million) and Ripple (AU $1.06 million).
Disclosure: The author owns a range of cryptocurrencies at the time of writing