Bitcoin’s Plunge to $29K, More Selling Ahead? Here Is What To Expect in the Coming Days for the Markets

Bitcoin fell to lows of $29,301 for the first time since Jun. 22, dragging the crypto market lower. At the time of writing, Bitcoin was trading at $29,851, down 3.52% on the day.

Altcoins compounded existing weakness as Bitcoin fell, with many of the top 100 cryptocurrencies by market capitalization trading in the red as of press time. However, selected tokens such as UNUS SED LEO (LEO, +4.09%), FTX token (FTT, +4.99%), Compound (COMP, +2.04%) managed to suppress the selling wave by trading in the green.

The plunge in Bitcoin price comes after a big sell-off in global stock markets. Stocks fell sharply on Monday as worries swept from Wall Street to Sydney that the worsening pandemic in hotspots around the world will derail what’s been a strong economic recovery.

The selling pressure became widespread as fears that more infectious variants of the COVID-19 virus will drag particularly hard on economies where vaccination rates are low.

BTC/USD Daily Chart 

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin trimming its assistance for markets later this year.

Here Is What To Expect in the Coming Days for the Markets

On-chain analytics, Glassnode notes a heavily divided market sentiment, predicting extreme volatility may be imminent for the markets:

“We have an extremely divided market, and one with a likely expansion of volatility just around the corner.”

Also contributing to the bearish case for Bitcoin is the performance of the Grayscale (GBTC) bitcoin trust share price. The GBTC shares continued to trade last week at a notable discount to the fund’s net asset value, ranging between 11% and down to 15.3%, demonstrating lackluster demand for the cryptocurrency, according to Glassnode.

“We’re going to need to form another base first before resuming another bull trend,” said Vijay Ayyar, head of Asia Pacific with cryptocurrency exchange Luno in Singapore. “We are going to be ranging between $20,000 and $40,000 for the rest of the Year.”

He notes that Bitcoin’s fall below $30,000 could be significant, as the sell-off could go lower to test the $22,000 to $24,000 level before Bitcoin enters into a range.

Cryptoanalyst, Rekt Capital noted that ”Bitcoin is retracing deeper inside the lower half of this blue down-trending wedging structure after the rejection from the orange mid-point. BTC may retrace to as low as ~$28,000 while still maintaining market structure”

On the other hand, Glassnode notes that the Bitcoin reserves of centralized exchanges have continued to evaporate, which suggests accumulation. The oversold RSI suggests a relief rally, or at least a dead cat bounce, may ensue for Bitcoin in the coming sessions.

Image Credit: Shutterstock