Bitcoin [BTC] underwent a swift recovery, after topping out a little below $40k. The ongoing downside price action has left the investors concerned.
The latest side-way movement of price had taken shape since the dramatic fall in May and has extended to the new quarter as well. The drop was so damaging that it ended the winning streak for the digital asset which witnessed its prices surge above $60,000 for the first time in its decade-long history.
However, this trend could potentially come to an end as institutional players could soon push the asset’s price higher. Here are three reasons why a potential uptrend could be right in the inkling:
Institutional players’ comeback
One of the major recurring narratives for Bitcoin has undoubtedly been the Institutional adoption for both 2020 and 2021. While the entry of these players boosted the price of the token, after Tesla’s latest actions, institutional adoption seems to have taken a hit considerably.
But according to a key member of the crypto-analytic platform, Santiment, the price of the king coin can potentially continue to range until mid-July this year, before the institutional players in the market drive the new BTC resistance level up to $40k. The analysis also read,
“When you are enjoying yourself in the rain [especially when you were a child]. You lose track of all time. Bitcoin price is experiencing the same thing for this month.”
June-December 2019 Resemblance
The resemblance of Bitcoin’s current price action to that of June-December 2019 is uncanny. In fact, the flagship crypto-asset had surged all the way above the $14k in the last week of June 2019. Shortly after which it spiraled down as FUD entered the market in the form of Bitcoin Cash [BCH] hard fork, the then US President Donal Trump’s take on the token among other news.
Six months later, Bitcoin slashed over half of its gains and turned down to $6.5k. As a result of the decline, the charts saw death cross formation. However, as bulls bought the dips, Bitcoin recovered and slowly formed lower highs surging briefly to $10k.
Coming down to the present scenario, the latest trend could suggest a similar profit-taking phase, and a period of FUD that was sparked by Elon Musk’s announcement, China’s clampdown on cryptocurrency activities, etc.,
Grayscale Bitcoin Trust
Many well-known cryptocurrency analysts are of the opinion that the Bitcoin market could get a lift in July from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust [GBTC], and not downward pressure as earlier reported by JPMorgan strategists.
One of the main possibilities that some market speculators see is the foray investors to the coin market to buy BTC and repay crypt loans used for the purpose of financing their original purchases of the GBTC shares. Meaning, that while selling GBTC shares does not eliminate the risks of deeper discounts that could potentially ward off capital inflow, but, this adversary can be compensated by the repurchases of the cryptocurrency in the spot market.
Along the same line, Amber Group, the digital asset service provider tweeted,
“Lots of bearish chatter around GBTC unlocks whilst conveniently ignoring that in-kind subscriptions funded by debt will ultimately translate into spot buying,”