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After the Bitcoin price hit a new yearly high of $32,410 last Friday, June 23, the price rally has stalled for the time being. While the long-term outlook looks extremely bullish due to various Bitcoin spot ETF applications, there are currently a few reasons in the short-term which prevent a continuation for now.
Today, Wednesday, June 28, several negative news are weighing on the market’s sentiment. First and foremost, the depegging of the fourth largest stablecoin by market cap, TrueUSD ($TUSD), may have unsettled investors. As Bitcoinist reported earlier today, the latest revelations surrounding Prime Trust have raised new doubts that $TUSD is fully backed with reserves.
Remarkably, $TUSD is the most important trading pair ($BTC/$TUSD) in the entire market, with around 15% and $2.6 billion in trading volume on Binance in the last 24 hours. The rumors could have a negative impact, as shown by previous stablecoin depeggings by USDT and USDC.
🚨 $TUSD depegging: New crypto drama unfolding?
1/@adamscochran raises several red flags:
– Auditor who attested $TUSD audits (in Prime Trust) is the rebranded old FTX US auditor
– Oracle price is obtained from a single entity
– Bank partners are unknown— Jake Simmons (@realJakeSimmons) June 28, 2023
Another factor that is probably having a negative impact on the Bitcoin price is the behavior of Bitcoin miners. As Glassnode reports today, Bitcoin miners are currently experiencing extremely high interaction with exchanges, sending an all-time high of $128 million in $BTC to exchanges, representing 315% of their daily revenue.
In an analysis today, CryptoQuant writes that miners have sent over $1 billion in $BTC to exchanges since June 15. About 33,860 $BTC were sent to derivatives exchanges, although the majority flowed back into their own wallets. Miners saw a reduction in their reserves of about 8,000 $BTC. Remarkably, only a small portion was sent to spot trading exchanges.
According to the on-chain experts, this could indicate that miners are using their newly minted coins as collateral in derivatives trading. A good example of this type of trading is so-called “hedging,” where bets are made in the opposite direction to the market consensus.
Bitcoin Consolidates, More Reasons
Also weighing on market sentiment could be the record-breaking amount of $BTC options expiring on Friday, June 30. Traders could take a wait-and-see approach in the run-up. However, Greeks.Live analysts comment that institutions such as Fidelity and BlackRock continue to drive the positive developments; the volume of $BTC block calls now accounts for more than a third of the total volume.
“Both $BTC and $ETH are currently significantly above their maxpain points, but due to the weakness in $ETH prices, a large number of market makers have continued to sell $ETH calls, while buyers have concentrated more on $BTC, which has caused $ETH IV to be significantly lower than $BTC,” the analysts say.
The market may also be on a wait-and-see approach ahead of Friday’s release of the PCE (Personal Consumption Expenditure) index numbers. “After a similar PCE report spurred $BTC from $26k to $28k, we wait with bated breath. A positive PCE outcome can spark a bullish uptrend in $BTC,” the co-founders of Glassnode (@Negentropic_) write.
Last but not least, it should be noted that Bitcoin price is facing an extremely important resistance area $31,000 and consolidation is normal. After last week’s rapid rise, the daily RSI is still just below the overbought area at 66.3.
As analyst @52Skew points out, $BTC remains in a tight consolidation, with price fluctuating between supply and demand blocks. “4H / 1D EMAs catching up to price & in key $29K area,” the analyst notes via Twitter and surmises, referring to Binance Open interest, “Pretty much still the same, chop chop. Eventually there will be liquidity grab imo; which will probably lead to a trap.”
At press time, the Bitcoin price remained in its tight consolidation range.
