Bitcoin (BTC) price fell below this level again at the time of writing, after exceeding $ 30,000 during the day.
According to Konstantin Anissimov, an independent digital asset analyst, the bearish trend in the market is largely driven by futures prices, which reflect the expectation of a large sell-off by the authorities.
Analyst Links Bitcoin Price Drop To Expected Selling From US Government
“I think this price drop was mostly due to the signs of bearish futures prices and news that the US government is preparing to sell $300 million worth of Bitcoin,” Anissimov said. “I believe the market expects this to happen very soon.”
Anissimov pointed out that Bitcoin's daily trading volume is currently relatively low, making the market more vulnerable to large-scale movements.
“The total daily volume traded in Bitcoin is currently less than $2 billion,” he said:
“My assumption is that part of it is wash trading. So, a $300 million BTC sale should and will result in a negative price action.”
However, Anissimov does not expect the decline to last long as he expects a price correction after the sales.
On the other hand, Noelle Acheson, author of Crypto is Macro Now, argued that the BTC price is also influenced by global macroeconomic factors, particularly the US dollar index (DXY), which measures the strength of the dollar against a basket of other currencies:
“It will be difficult to shake the BTC-DXY relationship for a long time. Not only is the US dollar the denominator of the most traded pair for BTC and the ratio rises when the denominator depreciates, but a weaker dollar also increases global liquidity, giving US dollar debt holders around the world more room to breathe.”
*Not investment advice.