Why another Bitcoin sell is possible before it reacges $100K

Why another Bitcoin sell is possible before it reacges $100K

By bit.team

The first cryptocurrency by market capitalization was able to recover from the lows and is currently struggling with a resistance of $36K. If BTC manages to break through and hold the opening of the month at $35,000, another jump is likely to occur in the coming days. The rise this weekend was an important step in this direction.

However, a trader under the pseudonym NebraskanGooner advises caution since Bitcoin has been rejected at current levels.

Alex Mashinsky, the founder of the Celsius Network, shares a similar thesis. He believes that Bitcoin has experienced two cases of selling in May and June. The first was caused by FOMO purchases from retail investors, when the price of BTC was at an all-time high of $65,000.

These investors sold at a loss when the value of BTC reached a maximum of $40,000, and they continue to do so as the downtrend expands. The second capitulation was initiated by the mining sector.

China’s harsh measures against BTC miners forced them to sell some of their assets and withdraw their activities outside the country. In addition, China’s regulators have closed the banking business related to cryptocurrencies.

Grayscale Effect Threatens Bitcoin Price

In total, in May, retail investors sold about $6 billion worth of BTC, and in June, Chinese miners and users did it. The third case of capitulation may be the last, but it may also be the worst in the current year. Mashinsky said:

“We will get another wave of sales. In this case, from FOMO in $20 billion. the cost of GBTC ARB. Hedge funds used loans from Genesis and others to buy BTC in January-February 2021, which will begin unlocking next week”.

Grayscale Bitcoin Trust buys the underlying asset and offers its clients GBTC shares. They can be sold at a discount or at a premium compared to the spot market. The trust’s shares remain “blocked” for these investors for 6 months.

After this period, they can trade their shares on the market and enjoy a premium. GBTC shares will be “activated” in the coming weeks.

Mashinsky believes that this event will negatively affect the value of Bitcoin, since Grayscale will have to “sell BTC” to compensate hedge funds for losses that will want to abandon their positions. After that, the BTC price, finally taking a breather, can rise to previous highs and higher. Mashinsky declares:

“GBTC shares will be dumped by at least $5 billion, which can push the BTC to the level of $29,000. But after this July sale, nothing will prevent the BTC from moving calmly to the price range of 140-160K USD per coin”.

July will be a crucial month for Bitcoin. It seems that influential forces are operating in the market. And these forces are institutional investment funds. So, many people should reconsider their enthusiasm about the arrival of institutionals in the crypto industry, since the BTC gets into a rather strong dependence.

But, if the rally continues, it is vital for BTC to reach new lows, and then we can only wait. Perhaps in this scenario, retail investors will have a fabulous opportunity to buy BTC on a colossal drop.