The price of Bitcoin has fallen below $30,000 as regulatory and macroeconomic worries take center stage, dampening investor enthusiasm. Several factors contribute to this decline in BTC price.
On July 13, Bitcoin struggled to break above the $31,800 level, leading to a 6.3% correction down to $29,700 on July 17. This price action reflects concerns among investors that ongoing regulatory developments and macroeconomic headwinds could push Bitcoin below the $29,000 level observed in June.
While Bitcoin futures indicate increased demand, Asian markets are showing signs of slowing down. Typically, Bitcoin quarterly futures trade at a slight premium compared to spot markets, which is known as contango. Between July 14 and July 17, BTC futures maintained a neutral-to-bullish 7% premium, suggesting moderate conviction among bulls following the failed attempt to surpass $31,800. However, the premium for Tether (USDT) in Asia has been declining, indicating a decrease in demand from China-based retail crypto traders.
Regulation remains a significant concern for the crypto sector. Although the SEC ruled on July 13 that the sale of XRP did not violate securities regulations, it did not definitively determine the classification of XRP’s initial coin offering (ICO). This lack of clarity raises unease among investors and the possibility of other cryptocurrencies facing similar securities designations. Additionally, Binance’s layoff of 1,000 employees and the departure of key executives have raised questions about the exchange’s future and ongoing court actions from regulators.
Furthermore, unfavorable macroeconomic conditions have affected Bitcoin and risk-on assets. China’s GDP growth slowed to 6.3% in the second quarter due to factors such as the trade war with the United States and the government’s efforts to address debt.
Considering these external factors and pending court decisions that could impact major exchanges, the likelihood of Bitcoin breaking below $29,000 has increased. This creates a favorable scenario for bearish sentiment, strengthening resistance at the $30,000 level.
While there is no specific catalyst restricting Bitcoin’s upside potential, worsening macroeconomic conditions and indications of interest rate increases by the Federal Reserve in 2023 contribute to the current market dynamics. BTC futures show higher confidence among professional traders using leverage, but the sell pressure from retail investors in Asia limits overall cryptocurrency upside.
It’s important to note that this article provides general information and should not be considered legal or investment advice. The expressed views solely belong to the author and do not necessarily represent those of Cointelegraph.