As Bitcoin’s price plummeted to $29,000, dip buyers swooped in, but analysts warn that the crypto market has been unable to find a bottom due to China’s ban on BTC mining and a lack of buy activity.
On June 22, cryptocurrency investors were given no respite when the price of Bitcoin (BTC) plunged below $30,000 for the first time since January, causing alarm among newcomers to the industry who had not yet experienced a full market cycle.
Whilst BTC has been under pressure from a variety of factors since early May, the most recent bout of trading has been mostly linked to concessions by Chinese miners who have been forced to shut down their operations immediately.
BTC price has risen back beyond the $30,000 threshold, according to data from Cointelegraph Markets Pro and TradingView, after falling to $28,800. It now trades for $32,600.
After remarks from Brian Nelson, the current nominee for Under Secretary of the Treasury’s division on terrorism and financial crimes, the stock jumped sharply. If Nelson is elected, he has stated that implementing new cryptocurrency restrictions will be a top priority.
China’s miner crackdown has caused market chaos
Élie Le Rest, a partner at digital asset management firm ExoAlpha, addressed the constraints on Bitcoin and the entire cryptocurrency market. “Chinese market participants have been massively selling during the past month,” Le Rest told Cointelegraph.
The “Grayscale unlocking schedule leading to more selling pressure,” according to Le Rest, has resulted in some frantic trading by less experienced traders in the market.
“With newcomers in the crypto market seeing their profit and capital getting wipe out by selling waves, newcomers are taking their loss as they can’t stomach this much negative volatility anymore.”– Le Rest
Due to these pressures, Le Rest believes that the market could range in the “lower tranches of $25,000 to $35,000” in July, with the low volume usually seen in August having the potential to “accelerate this downside trend or build the upside trend.”
The upside case for today’s move was provided by David Lifchitz, managing partner and chief investment officer of ExoAlpha, who stated that the activity seen in the market on June 22 “seems to have drawn the line in the sand for BTC at $29,000 and Ether (ETH) at $1,700, given the swift bounce.”
That being said, Lifchitz warns against throwing caution to the wind as the volatile nature of the crypto market makes picking a bottom notoriously challenging.
“However, it’s too early to tell if this is “the” bottom or just a temporary floor before more downside. The lack of any upside catalyst (besides some contrarian oversold metrics) remains the biggest hurdle for cryptos to bounce back… Paging Mr.Musk, paging Mr.Musk.”– Lifchitz
Altcoins are down by double digits
The altcoin market followed Bitcoin’s lead on June 22 with a majority of tokens seeing double-digit losses as traders ran for the safety of stablecoins.
The price of Ether managed to rebound along with the price of BTC, helping erase a 15% correction and send the price back above $1,900.
Two tokens that managed to rise above the market turmoil and see positive gains for the day were Livepeer (LPT), which posted a 15% gain and Celo (CELO), which saw its price increase by 9%.
The overall cryptocurrency market cap now stands at $1.303 trillion and Bitcoin’s dominance rate is 47.1%.