Bitcoin has been trying to reclaim the $70,000 region ever since the market rejected it more than a month ago. It has been battling multiple resistances at various levels over the past few days. On July 29, it was finally able to touch this position but could not hold it for long. After facing a rejection of more than 4%, the price dropped to $66,500, breaking multiple support levels and surpassing all moving averages. Let’s explore the reasons for this sudden drop and what to expect next.
Multiple supporting factors
There were many factors that led to Bitcoin breaking through all resistance levels and surpassing the $70,000 mark a month later. The biggest of these was former US President Donald Trump’s speech at the Bitcoin 2024 conference in Nashville.
Trump has publicly expressed his support for Bitcoin and the crypto ecosystem. He has promised that if elected, he will not sell Bitcoin confiscated by the US government. Instead, he has expressed his desire to turn confiscated Bitcoin into a strategic reserve. Donald Trump has repeatedly stated that he is willing to make the United States the largest player in Bitcoin. He wants Bitcoin and the entire crypto ecosystem to flourish in the United States.
The biggest obstacle
The $70,000 area is one of the biggest resistance levels as it is the old high for Bitcoin. According to experts, this will be the biggest challenge for BTC. There is a lot of selling pressure liquidity at this level, so positions cannot be maintained and are rejected. MA 20 tried to keep the price around $69,000, however, the intensity of the selling pressure broke this level. It even broke the next support level at $68,000. After this, traders started to panic, causing the price to slide further.
US Government BTC Movement
Just as Bitcoin was falling due to high selling pressure, the US government made some adjustments to its Bitcoin holdings. They moved 298,000 BTC (worth $2.02 billion) out of the 183,439 Bitcoins they held to an unknown address. This brought a new fear into the market. As the news broke, a large number of tweets stated that the US government was planning to sell these BTCs, causing panic in the market. This caused Bitcoin to fall to $66,500.
What happens next
As of now, the owner of the wallet that received $2.02 billion worth of Bitcoin from the US government remains unknown. Therefore, it is almost impossible to tell what their next move will be. Is it the wallet of some other government and they plan to use this Bitcoin for some purpose or it is just a move, no one can say for sure. However, we are sure that some information will surely come out in the near future. Bitcoin is now trying to maintain its price as the bear market forces are weakening. We can only expect that the price will soon rise again as the world builds a supportive environment for the cryptocurrency.
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