Bitcoin (BTC) dropped below the psychologically-significant $30,000 mark to as low as $29,733 on July 21st. For months, BTC among other cryptocurrencies has been moving sideways, which can be attributed to several omnipresent trends.
BTC/USD - 1 Week Time Frame
Short-term traders have capitalized on the recent price bump in BTC, causing selling pressure to an otherwise-bullish drive. The low-price volatility can also be attributed to Bitcoin miners selling BTC reserves ahead of the upcoming halving event.
Futures demand for BTC has been climbing against sideways price action, which is among the key forces moving the markets. Despite the current drop below $30k, the fundamentals on BTC can be still considered as bullish.
As Bitcoin encountered difficulties breaking above $31,800 on July 13, a 6.3% downward price correction down to $29,700 on July 17 can be noticed. The price action could reflect investors’ concerns over regulatory developments and macroeconomic worries that could drive Bitcoin below $29,000.
The conditions surrounding volatility dynamics also seem to be a driver in the horizontal movement. Over the past 10 days, Bitcoin is showing signs of decreased volatility.
Bitcoin Volatility Index (BVIN) has dipped from 57.8 on July 11th to 49.2 on July 20th of the current year. History has shown that a drop in BTC volatility and increased market-entry by long term traders are correlated – will history repeat itself and catapult Bitcoin to new all-time highs?