Bitcoin Price Dips Below $30K as Extreme Fear Grips the Crypto Market
The BTC price crashed below the $30K support on July 20, as the Crypto Fear & Greed Index fell to 19/100, denoting extreme fear from market participants. The traditional markets shared a similar fate, with the DOW, S&P 500, and NASDAQ also registering heavy losses on the day.
Panic Selling Ensues
The current bearish sentiment in the crypto and traditional markets comes as Covid-19 cases surge across the world, leading to a pullback in the global economy. As a result, panic selling has gripped the market, leading to $135M worth of BTC being liquidated in an hour, per Bybt analytics data shared by Wu Blockchain.
Following a night of jittery price action that saw bitcoin lose crucial support, respected trader Michaël van de Poppe expressed concerns that the price could fall a lot further. He tweeted:
Rejects $32.3K, Rejects $31K, and now at the next support zone.
No real run of volume yet, through which the liquidity tap should still happen or we'll see a test at $24K for #Bitcoin. pic.twitter.com/wAHUNFV3aF
— Michaël van de Poppe (@CryptoMichNL) July 20, 2021
The market-wide sell-off that has dragged on since May is causing institutional investment in bitcoin to evaporate, further compounding losses.
The decline in interest from big-money investors is evidenced by a decrease in the Grayscale Bitcoin Trust market price (GBTC). Glassnode data also flagged the most significant net outflow from the Purpose ETF since mid-May, further confirming the muted activity from institutional players.
On-chain Data Hints at Ongoing Accumulation
According to the latest Glassnode on-chain report, large investors may be steadily accumulating BTC despite the current carnage in the market. The analytics firm pointed to a sharp decline in the BTC reserves of top trading platforms, with $1 billion worth of coins leaving exchanges every month.
The theory that whales are actively buying the dip was confirmed by Lex Moskovski, the CIO of asset management firm Moskovski Capital. He tweeted that whales have so far accumulated nearly $1.7 billion worth of coins.
#Bitcoin supply held by whales (1k-10k wallets) has erased the whole Tesla/China sell-off and are back to the levels of $57k BTC.
Whales are unironically accumulating. pic.twitter.com/Rqbd22EvBl
— Lex Moskovski (@mskvsk) July 19, 2021
On the other hand, CryptoQuant data shows that miners are selling their bitcoin stashes, likely to cover the enormous expenses incurred during the ongoing mass exodus from China.
ETH Breaks Key Support
The ETH price is down over 6% after gaining bearish momentum over the last 24 hours, per data from Coinmarketcap. The top altcoin traded below the $1,850 support zone and extended losses as bears controlled the price action.
Analyst Rekt Capital tweeted that Ether had lost this year’s Higher Low trendline of $1,819, indicating that the cryptocurrency could be gearing up for more losses in the near term.
$ETH has lost its 2021 Higher Low trendline#ETH #Crypto #Ethereum pic.twitter.com/vWYKK2l1r0
— Rekt Capital (@rektcapital) July 19, 2021
The poor performance of other popular digital assets such as BNB, ADA, DOGE, and UNI summed up the grim picture on the crypto market this week. In fact, out of the top 100 cryptocurrencies, only UNUS SED LEO and DASH have shown any notable signs of life over the past 24 hours.
