The cryptocurrency market reached a point of no return during last week's trading. Large players accumulated volumes of coins, retailers returned to the market, and the media component of Bitcoin peaked. In addition, the first cryptocurrency leaped and broke through the $40,000 threshold. The market was optimistic, with major indicators pointing to the launch of a bullish trend. However, BTC failed this attempt, and as of June 22, the asset is quoted at around $32,000, and risks aggravating the downward trend.
There are several reasons for such a powerful drop in the indicators of the first cryptocurrency. The first factor is to combine the negative news background, which directly influenced the outlook for Bitcoin. Negative announcements have formed an unpleasant reputation around BTC and weakened the interest of the retail audience. In the future, the news background will stabilize for a while, which will allow Bitcoin to reach the $40,000 mark. However, the background, formed by negative statements and numerous prohibitions, levels out a full-fledged wagering of good impulses. Subsequently, when the cryptocurrency faced resistance around $41,200, the news background contributed to the pullback of BTC to the main support level. The main epic of the last two weeks was the gradual ban on mining in China, which still puts pressure on the quotes of the BTC/USD pair. Moreover, governments of many countries are concerned about the dark side of the first cryptocurrency and are actively developing ways to regulate it. This suggests that in the future, digital coins will be subject to strict legal control, which is already causing a lot of concern. For example, the chief strategist of the consulting company BCA Research, Peter Berezin, is confident that the regulation of cryptocurrencies will lead to the disappearance of BTC.
We move from fundamental factors to local ones. Before the beginning of the bullish trends, the market saw a huge surge in activity and interest in the first cryptocurrency. All this has led to a record outflow of coins from cryptocurrency exchanges. A large number of longs were opened, the news background gradually stabilized, and medium-term indices began to acquire exclusively bullish sentiments. However, the first alarm bells in the form of a growing number of shorts appeared at the turn of $40,000. The subsequent upward movement led to the fact that BTC stumbled upon a correction in the region of $41,200. As a result, the cryptocurrency sank abroad at $39,000 due to the strong positions of sellers and profit-taking in Bitcoin by part of the audience. A further drop was triggered by the breakdown of an important support level at $38,000. The bitcoin audience did not support the asset at a critical moment, which is why the asset's quotes fell into a correction corridor, which was aggravated by the manipulation of whales and the negative news background.
The Chinese government has ordered all mining companies to cease operations by June 20. This process was accompanied by a record drop in the average hash rate in the Bitcoin network since 2020, which also hit the asset's performance. Over the past week, the first cryptocurrency has fallen in price by 20%, and over the past day by 5.5%. In addition to the negative news background, the bearish mood of traders was significantly affected by the prospect of creating a "death cross" on the Bitcoin charts. All this reduced social activity in the coin's network, and also provoked a sell-off, as indicated by a surge in daily trading volumes. In addition, according to CryptoQuant, in June, a record transfer of Bitcoins was made to cryptocurrency exchanges since March 2020.
It is not worth counting on the growth of BTC quotes in the near future. The cryptocurrency has reached the $32,000 mark, but there is no surge in buyer activity in the market, despite the pleasant price. This indicates the extreme uncertainty of investors, which is also evidenced by the fear and greed index, which is located at the Extreme Fear mark. In addition, over the past four days, the number of Bitcoin addresses has fallen by 28%, which indicates a continued decline in quotes. The next significant level of support for BTC will be the $28,000 mark. If it is broken, the range of fluctuations will shift to the region of $20,000 - $25,000.
Despite this, Bitcoin continues to show extremely positive dynamics in the long term. According to CryptoQuant, miners and whales continue to accumulate and hold Bitcoin volumes. In addition, the relocation of the mining industry from China will serve to promote the decentralization of BTC and the use of clean energy. In the visible future, an increase in interest in Bitcoin is expected against the backdrop of the next investments of MicroStrategy.
