 ▲ Bitcoin (BTC) |
Cryptocurrency leader Bitcoin (BTC) is moving sideways around $65,000 on the 20th (local time). This is a drop of about 12% from the all-time high of $73,750 achieved on March 14th.
The price of Bitcoin has been moving sideways within a range of about $7,500 for the past four weeks, with the 2017 all-time high of about $69,000 remaining a stubborn resistance level.
In particular, since May 17, BTC has been fluctuating between $72,000, which acts as a resistance level, and $60,000, which acts as a support level. Repeated attempts to break the all-time high have been unsuccessful, leading to a decline in trading volume, suggesting that the consolidation period will be prolonged.
As for the main reasons for the stagnation in Bitcoin prices, Cointelegraph diagnosed that it was cash-and-carry arbitrage and a decrease in trading volume.
Cash and carry arbitrage involves buying BTC in the spot market and selling futures contracts at the same time, which weakens the impact of buying inflow.
At the same time, the volume of transactions processed on the network has decreased and the daily trading volume on exchanges has also decreased significantly, indicating a decrease in investors' desire to speculate. Ultimately, the analysis is that demand and selling pressure are balanced and BTC price volatility is maintained at a low level.
Additionally, Cointelegraph said, “Bitcoin price is trapped between strong support between $61,000 and $65,000 and a supply disruption zone between $65,100 and $72,500. Pressure on the demand side has been enough to absorb selling pressure, but further upside is unlikely. “It is not enough to stimulate the price, so the price is moving within a certain range,” he explained.
Meanwhile, according to The Block, ETC Group, a European cryptocurrency asset management company, stated in a report that “cryptocurrency hedge funds’ exposure to Bitcoin has reached its lowest level since October 2020.”
“Over the past 20 trading days, the Bitcoin exposure index of cryptocurrency hedge funds decreased to 0.37. In addition, the exposure of hedge funds is decreasing and the outflow of funds from the cryptocurrency ETP market is moving almost in the same direction. However, because hedge funds carry out various strategies simultaneously, it is difficult to pinpoint why they reduced their exposure to Bitcoin. In addition, hedge funds react very quickly to market conditions, which means that the market timing is not good right now. “If the cryptocurrency rally begins again, hedge funds will also return to the market,” he predicted.
According to CoinMarketCap on the 20th (Korean time), the price per Bitcoin is $64,937 as of 7:27 am on this day.
