Bitcoin price falls below $30,000 as macro and regulatory concerns take center stage

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Several data points indicate that Bitcoin price is falling below $29,000 in the near term.

Yes, you read that right.

Let’s take a look at the major issues contributing to the current Bitcoin price decline.

Bitcoin (BTC) struggled to break above $31,800 on July 13, leading to a 6.3% correction to $29,700 on July 17. last seen on June 21.

On the derivatives side, Bitcoin futures are showing increased demand, but Asian markets are slowing.

Quarterly Bitcoin futures typically trade at a slight premium to spot markets, reflecting sellers’ desire to receive more money in exchange for delayed settlement. Healthy markets typically feature BTC futures trading at a 5% to 10% annualized premium, a situation known as contango, which is not unique to crypto markets.

Bitcoin 3 month futures premium. Source: Laevitas.ch

Between July 14 and July 17, BTC futures maintained a neutral to bullish premium of 7%, breaking through the 5% threshold. This suggests moderate conviction among the bulls after the failed attempt to break above $31,800.

However, the Tether (USDT) premium in Asia has declined. The stablecoin premium serves as a demand indicator for China-based retail crypto traders, measuring the difference between peer trades and the US dollar.

Tether (USDT) peer-to-peer against USD/CNY. Source: OKX

Tether premium in Asia recently hit a 1.8% discount, marking its lowest point in more than six months. This reverse trend in premiums began on July 12 and has continued to widen, indicating moderate selling pressure.

Regulatory Concerns Continue to Plague Crypto

Regulation of the crypto industry is also always on the minds of investors. Even the July 13 ruling that selling XRP through exchanges and OTC desks did not violate securities regulations boosted markets, the SEC ruling did not definitively determine whether the initial offering exchange (ICO) of XRP was classified as a security offering. This lack of clarity has left some investors uneasy, as it raises the possibility that other cryptocurrencies also face potential title designations.

In addition to the SEC ruling on XRP, Binance also announced the layoff of 1,000 employees. Although the exchange has refuted the reports and claimed routine resource reallocation and ongoing hiring, concerns have arisen over Binance’s future following the departure of several key executives and ongoing legal action. of the regulator.

Related: SEC vs. Ripple Referred to Judge Who Ordered Release of Hinman Documents

Macro Trends Do Not Favor Crypto

The macroeconomic environment has not been favorable for Bitcoin and risk assets. China’s GDP growth slowed to 6.3% in the second quarter, below market expectations, with factors such as the ongoing trade war with the United States and the government’s efforts to deal with debt contributing to the slow-down.

Given the external factors and pending court rulings that could negatively impact the two largest exchanges, the odds of Bitcoin falling below $29,000 have increased. This creates a favorable scenario for the bears, causing the $30,000 resistance to strengthen.

Bitcoin price could drop below $29,000 this week

There does not appear to be any specific catalyst limiting Bitcoin’s upside potential, other than deteriorating macro conditions and indications of further interest rate hikes by the Federal Reserve in 2023.

From a trading perspective, BTC futures are showing greater confidence among professional traders using leverage. However, selling pressure from retail investors in Asia is limiting the overall rise in cryptocurrencies.

Given the external factors and pending court rulings that could negatively impact the two largest exchanges, the odds of Bitcoin falling below $29,000 have increased. This creates a favorable scenario for the bears, causing the $30,000 resistance to strengthen.

This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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