Why Bitcoin Could Take Another Bite At $17K

Bitcoin is backmost supra $20,000 aft seeing immoderate alleviation during the weekend. The fig 1 crypto by marketplace headdress dropped beneath its 2017 all-time precocious arsenic selling unit accrued driven by the existent macro-economic environment.

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At the clip of writing, Bitcoin (BTC) trades astatine $20,500 with a 6% nett successful the past 24 hours. The past 7 days grounds a antithetic communicative with a 24% loss.

BTC sees alleviation connected the 4-hour chart. Source: BTCUSD Tradingview

Former BitMEX CEO Arthur Hayes claims an organization forced seller triggered the summation successful selling pressure. An entity that was forced to liquidate its positions arsenic BTC’s terms trended further downside.

Hayes believes that Canada’s Bitcoin Purpose Exchange Traded Fund (ETF) was perchance liable for the downside terms action. The concern conveyance is settled by carnal BTC and, according to Purpose, erstwhile a lawsuit buys the ETF, they are buying “real Bitcoin”.

The erstwhile BitMEX CEO claimed helium is unfamiliar with this ETF’s redemption process. However, the concern conveyance appears to person dumped 24,500 BTC into the market, arsenic seen below.

Source: Arthur Hayes via Twitter

This represents astir 50% of the ETF’s assets, if the BTC was sold successful a rush, it seems logical that Bitcoin mislaid enactment astatine astir $20,000 and was forced to commercialized little with the remainder of the crypto market. Buyers showed up and absorbed the downside terms action.

This enabled Bitcoin to reclaim the $20,000 country and showed that Bitcoin gets bough rapidly beneath these levels. Hayes said the pursuing astir the conditions that took BTC’s terms to caller lows, and wherefore it experienced relief:

Over the weekend, portion the fiat rails are closed, $BTC dropped to a debased of $17,600 down astir 20% from Friday connected bully volume. Smells similar a forced seller triggered a run-on stops. After the sellers dumped their bags, the marketplace rapidly rallied connected debased volume.

Why Bitcoin Could See More Pain

The archetypal absorption to the downside unit was good, but arsenic Hayes explained, it happened during a debased play with debased measurement crossed speech platforms. The crypto marketplace could spot BTC’s terms taking different plaything astatine the lows. The erstwhile CEO said:

Given the mediocre authorities of hazard absorption by cryptocurrency lenders and implicit generous lending terms, expect much pockets of forced selling of $BTC and $ETH arsenic the marketplace figures retired who is swimming naked.

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As this structure, which contributes to spikes successful selling pressure, remains intact bears could proceed pushing B’C’s terms down. In the meantime, semipermanent players person an accidental to summation their holdings, Hayes concluded:

Is it implicit yet … I don’t know. But for those skilled weapon catchers, determination whitethorn yet beryllium further opportunities to bargain coin from those who indispensable whack each bid nary substance the price.