Bitcoin Drops Below $30,000 - Is it Just a Bear Trap?

Bitcoin's price has dropped below the $30,000 support mark this morning. However, if the largest cryptocurrency quickly regains its lost level, the current price action could be another bear trap.

July 20, 2021, | AtoZ Markets – Bitcoin (BTC) has broken out of the range that has been maintained over the past month, dropping below $30,000. At the time of writing, the premier cryptocurrency is trading at $29,700, with a decline of 6.5% per day.

The downtrend which has continued since the May 19 crash confirms the intensity of the bears' determination to bring the price lower.

According to AtoZMarkets technical analyst, if today's price action does not generate an avalanche of liquidation and a clearly higher volume bar, there is a chance that it will be another bearish trap.

"The technical indicators are bearish and do not indicate a possibility of a quick rebound. A few days ago, the RSI collapsed from the two-month support line, was thrown out of neutral territory and is headed sharply towards oversold. MACD has been in the negative area since May, and has been generating more and more negative momentum bars for several days."

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Crypto market bleeds as Bitcoin price drops

As a result of the Bitcoin price drops in the morning, the entire crypto market lost 7.5% of its value. According to data from CoinMarketCap, all major cryptocurrencies have lost 8-14% of their value, and the market value is currently $1,238 billion. This is the lowest value since February 8, 2021.

The Cryptocurrency Fear and Greed Index has fallen to 19, indicating panic among market participants.

Journalist Colin Wu drew attention to the fact that the price of the BTCUSD futures contract on the OKEx exchange is lower than the current spot price of Bitcoin, while the spread continues to grow. According to him, this is "a sign of loss of confidence among investors."

According to Glassnode, the outflow of Bitcoin, Ethereum, and stablecoin Tether (USDT) from centralized exchanges continues. This suggests a potential reduction in the pressure of future sales and the accumulation of assets in non-custodial wallets.

However, CryptoQuant analysts have found a surge in the flow of bitcoins from miners' wallets to trading platforms, which is fraught with continued pressure on the price of digital gold.

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