On Thursday, July 22, Bitcoin price climbed 8.50%, recovering above the $30,000 level. It ended up reaching $32,081.2 with a market cap of $598.99 billion. It has a 24-hour low of $30,718.69 and a 24-hour high of $32,815.74, with a net change of $1,328.12. This rebound came after BTC fell below $30,000 for the first time in a month last Tuesday. It wiped off $40 billion in the crypto market.
An analyst said that some investors see the $30,000 level as a key threshold for the digital currency. He added that the Bitcoin price’s recovery last Wednesday pleased crypto traders. However, it is still worthless in comparison to half of its all-time high of almost $65,000 last April.
One of the reasons for the decline in the price of the world’s largest cryptocurrency is the tight regulations of authorities in different countries.
In China, the government cracked down on the Bitcoin mining industry. They raided mining hubs across the mainland and cut the electricity supply of those who resisted. Also, Chinese authorities arrested over 1,000 people for suspected use of crypto who laundered money last June.
In the United States, Federal Reserve Chief Jerome Powell stated that cryptocurrencies impose great risk on individual investors and the wider financial system.
Additionally, the U.S. Treasury Department started to require crypto transfers worth $10,000 and above to report to the Internal Revenue Service.
Meanwhile, some proponents of digital currency see its involvement in the government as a sign of growing legitimacy. However, some skeptics said the regulation could kill people’s enthusiasm for cryptocurrency.
BTC Signs of Weakness
Although the price of BTC rebounded above the $30,000 threshold, derivative metrics still show signs of weakness.
An analyst stated that the derivatives gauge that flips negative should hold more weight compared to the presumptions on the bullish or bearish analysis of on-chain data.
In an initial interpretation, crypto experts are reviewing the futures contracts premium, which is also known as the basis. It allows crypto investors to understand how bullish or bearish professionals do the trading process.
Another analyst said that the neutral basis rates must be between 7% to 155 annualized. This difference in price is due to the sellers who demand more money to postpone the settlement. This situation is called contango. However, when this premium fades away or turns negative, it will be a bearish scenario known as backwardation.
At the moment, pro traders will lean on the bearish side after Bitcoin crashed on its $30,000 critical support. However, further confirmation can be obtained by looking at the options markets.