Bitcoin (BTC) suffers two days of downside – is the rebound for real?

The cryptocurrency market may be showing signs of unease following two consecutive days of price declines that pushed bitcoin back towards its support level around $64,000. The Grayscale Bitcoin Trust continues to sell off Bitcoin, and there are rumors that the US government could unload an additional $2 billion worth of Bitcoin. It remains to be seen whether this downward trend will persist or if the market will bounce back.

Following a monthly close exceeding $69,000, there was an anticipation that Bitcoin ($BTC) prices would keep climbing. However, persistent selling days from the Grayscale Bitcoin Trust (GBTC) have been hindering the growth of the other 9 Bitcoin Spot ETFs.

US government about to sell?

Additionally, the recent transfer of approximately $2.1 billion in Bitcoin from the U.S. government to Coinbase might lead to a price drop if they decide to sell.

At the present moment, it’s possible that the US government is acting to capitalize on Bitcoin’s current weakness and potentially drive its price below a significant threshold. However, this is merely a hypothesis, founded on the reported antagonistic stance of the Biden administration towards the cryptocurrency sector.

In essence, it could be seen as a risky decision for the US government to sell more of its confiscated Bitcoins, whether maliciously or not, given the potential future significance of Bitcoin. This significance may include a time when even governments must adopt a stance towards Bitcoin.

Mr 100 hoovers up whole daily issuance of $BTC

From the opposite perspective, Mr. 100, known for regularly purchasing bitcoin in increments of 100 BTC, bought an astounding 1,256 BTC within a 36-hour span as of Tuesday. With only 900 BTC being mined daily, such a large purchase by a single entity in a short time frame raises eyebrows and highlights the potential consequences of the US government’s decision to gradually sell off its substantial bitcoin holdings.

$BTC support holding?

On the daily chart for Bitcoin’s ($BTC) price, we observe that the cost has dipped beneath the trendline. Despite this, the underlying support has thus far prevented a significant drop. Additionally, the CME gap at this specific level is almost filled in.

It’s yet to be determined if the daily candle’s close will fall below the trendline, but the horizontal support level holds more significance at the moment. On shorter timeframes, the Stochastic RSI momentum indicator is bouncing back from the bottom, while the daily chart is trending downwards. This could potentially indicate an impending shift in upward momentum.

Weekly close will give clearer guide

Looking at the bigger picture of a week’s worth of data, Bitcoin’s price appears more organized. At present, it has managed to hold its ground at the $64,000 mark, but remains undecided about maintaining support levels at $67,000 as well as the existing trend line.

If Bitcoin (BTC) surpasses $67,000 by the week’s end, this would be a strong sign of continued growth. The final price point on Sunday will provide valuable insight into whether the Bitcoin rally will persist or if a more significant correction is imminent.

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2024-04-03 16:04