Bitcoin, the largest and most popular digital asset, has recently experienced a surge that followed the application of a spot BTC ETF by the financial giant BlackRock. The crypto king tested the 31k-31.5k level several times before settling into a consolidation zone. It seems to be struggling to break out of the 31k zone. Let us examine some possible reasons why BTC paused its parabolic move.
Several News that are Acting as Roadblocks to Bitcoin
The collapse of several crypto companies and projects, such as Terra (Luna), Celsius, and FTX, during the 2022 crypto market implosion had a domino effect on other companies. Genesis Global Trading, which had some exposure to FTX, was one of them. This also affected the crypto earn accounts of the Gemini exchange, which relied on Genesis for custody. Gemini is currently suing the Digital Currency Group (DCG), owner of Genesis, and its CEO over the fiasco. We have to take note that DCG also owns the Grayscale Bitcoin Trust, which owns over 600,000 BTC.
The departure of several Binance executives is another FUD that is spreading in the crypto space. Binance, the largest crypto exchange by volume, is subject to the watchful eye of investors who are concerned that any negative news could lead to a market dump. The exchange is also engaged in a legal battle with the US Securities and Exchange Commission over alleged regulatory infractions. The resignation of senior executives such as counsel Hon Ng, chief strategy officer Patrick Hillmann, and SVP for compliance Steven Christie creates doubts about the progress of the lawsuit.
Patrick Hillman said that he is leaving Binance on good terms, and he just needs to move on. He also cited that his decision was influenced by having a second child.
Changpeng Zhao (CZ), CEO of Binance, defended his exchange by saying that the reasons seen in the news were wrong. He cited that his organization is evolving, and turnovers are part of the process.
Let Us Look at the Bitcoin Charts
The chart shows us that Bitcoin is now within a strong resistance zone. This zone has served as support during the bull market, and it has been tested a lot of times before it got broken. Traders know that support can easily turn to resistance. Bitcoin needs to get out of this zone before continuing its rise.
The two graphs above show that bears are aggressively defending their positions and are probably taking advantage of all the FUD that is going around. We can see that the Bears have drawn a defensive line just above 31k. If the bulls succeed in breaching the line, a lot of bears will get liquidated. As you can see, this is a tug-of-war between bulls and bears.
What is the Long Term Outlook?
The crypto community firmly believes that Bitcoin is already in the early phase of the bull market, while several bears are expecting another major dump before a parabolic move. Both scenarios are possible, but we also have to recall that several financial titans are trying to open spot BTC ETFs. We have to remember that BlackRock’s CEO Larry Fink said that Bitcoin is digitized gold and is an international asset.
This is a billionaire whose company manages around $10 Trillion in assets. We can doubt the news and all the technical analysis, but maybe it is a good idea to copy what the financial elites are doing.
Image: Pixabay
