July 20 Cryptocurrency Market Update
July 20 Cryptocurrency Market Update
Date: Jul. 20, 2021, 06:18 PM KST
[Bitcoin Decline]
The price of Bitcoin has been pushed further down from the box-bound of $30,000. As of 2:30 pm on the 20th, the price of Bitcoin was pushed to $29,000, showing a 6% drop from the previous day. The prices of major cryptocurrencies such as Ethereum and Ripple are also on a downward trend. However, some say the bottom has been reached by now.
The current Bitcoin price decline is related to the global economy being shaken as concerns about the COVID-19 delta mutation grow while bad news from China overlaps with bad news from the United States.
The bad news from China is the closure of mining farms and the digital yuan blockage strategy. As the Chinese government relentlessly shut down its own Bitcoin mining farms, mining farms began to move to the United States and Kazakhstan, resulting in a weakening Bitcoin market.
The bad news from the US is exacerbated as US Treasury Secretary Janet Yellen prepares to put pressure on stablecoins while the extended reserve regime downplays the potential of Bitcoin. As pressure on stablecoins with relatively low price volatility begins, the entire Bitcoin and cryptocurrency market is in a panic.
The United States is also preparing a digital dollar, which appears to have contributed to the decline in the Bitcoin price.
The possible final blow is the COVID-19 delta mutation. As concerns were raised that the pandemic could last longer than expected, stock markets in each country fell, resulting in a downfall of the cryptocurrency market.
With the start of COVID-19 last year, cryptocurrencies such as Bitcoin were regarded as safe digital assets by the market and showed a large upward trend. However, this year, it seems to be declining along with the international stock market.
However, there are also rumors that the market price of cryptocurrencies such as Bitcoin will rise if countries take aggressive quantitative easing measures.
[New York Stock Exchange Fall]
As the supply of the novel COVID-19 vaccine began in earnest earlier this year, the US stock market took a big leap forward amid expectations for the restart of the economy. However, it is evaluated that optimism about the economy has narrowed as the ‘delta mutation’, which is highly contagious, has spread widely and the rate of vaccination has also slowed down.
On the 19th (local time) in the New York Stock Exchange, the Dow Jones Industrial Average plunged 2.1% (725.81 points) to close at 33962.04, the sharpest decline since October last year. The Standard & Poor’s (S&P) 500 index fell 1.6%, and the tech-focused Nasdaq index also closed 1.1% lower.
[Expert Opinion]
According to Glassnode, most of the Bitcoins currently being traded are being sold by investors near the peak and realizing losses. Additionally, currently 33% of Bitcoin was purchased at a price of $30,000 or more and has unrealized losses. Bitcoin did not hit that price level until January of this year, so they all belong to short-term holders. Long-term holders currently hold 75% of the circulation, which is expected to increase to 80% following current trends.
Glassnode said that lack of liquidity due to long-term holders’ acquisitions could trigger a price increase once again. They also observed that if the price of Bitcoin continues to decline, the next target would be $26,500, $23,300, and $18,800.
Cointelegraph analyst Rakesh Upadhya, said that if the BTC/USDT pair price falls below the $30,000 support level, it could drop to the key support of $28,000, and that it could be a buying opportunity if the stock defends the $30,000 support level and pushes the price above $31,000. He claimed that breaks and closes above the 20-day exponential moving average ($32,966) will be the first bullish signals.
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