After taking a nosedive under $30,000 on Tuesday, July 20, Bitcoin (BTC) is back once again securing its crucial support. At press time, the BTC price is up 3.59% at $30,694, and a market cap of $575 billion.
The world’s largest cryptocurrency has been showing highly volatile performance over the last few weeks, and thus it will be prudent to not make any fresh entry at this point. Some traders expect more pain ahead for Bitcoin as it has been constantly breaking key support levels on the downside. Speaking at CNBC’s Trading Nation show, Delano Saporu, founder of New Street Advisors said:
“I think you probably have more downside, maybe to around the $22,000 range [to] the $17,000 range for bitcoin going back to Dec. 20 of last year. However, “from there, I do think there’ll be upside,” he said.
With the upside, Saporu probably means for the short term and that’s exactly what we are seeing today. Although bearish for the short-term, Soparu predicts a bright future for long-term Bitcoin investors.
“A lot of people that were speculating when the price was really at its highs and they were jumping in at that time were really looking for a quick profit, they were wrong at that time,” he added.
The Bitcoin Sell-Off Could Be Temporary
In the same interview at CNBC’s trading nation, Fairlead Strategies founder Katie Stockton shared a bit different opinion. Stockton believes that yesterday’s dip under $30,000 marks the bottom of the consolidation phase. She adds the Bitcoin is now ‘ripe for a shakeout’.
A shakeout is symbolic of a false breakout under the crucial support levels. However, the price quickly jumps back once the market “shakes out those weak holders of bitcoin”.
As per Stockton, if Bitcoin bounces back this week, it would mean the sell-off was temporary. Furthermore, she pointed to a secondary support level of $27,000 above which the long-term trend remains intact. On the north side, a strong breakout above the 50-day moving average i.e. $34,500 would mean the consolidation phase has bottomed out.
As Bitcoin continues its downtrend, institutional players have been buying at every dip. On Monday, Cathie Wood’s Ark Invest purchased 300K shares of the Grayscale Bitcoin Trust (GBTC). In the last quarter, Rothschild added 100K shares of GBTC to its kitty.