What could possibly go wrong with bitcoin in July 2021?

07/07/2021

Bitcoin started July on a grim note marked with massive liquidations, and profiteering action crashing the price levels at $36K, way below the previous crucial $34,400 support level that experts vouched for. The current pattern indicates that traders are still looking at $30k as the next lower support since it has Bitcoin’s month-long trading range. It has also left analysts relying more on technical aspects of BTC’s price action to determine how the coin will perform next.

Source: TradingView

According to a technical analyst, Plan B, Bitcoin’s end month pattern is similar to its January 2019 pattern, after it closed the month with three red candles in a row this week and next 6 months will be make or break for S2F (again).

The stock-to-flow is a number that indicates how many years are required to achieve the current stock at the current production rate and the higher the number is, the higher the price.

Chart

Bitcoin’s performance in Q3 2020, Q1 2021, and Q2 2021, had many financial experts and other market speculators predicting that Bitcoin would definitely reach $100,000.

Is Bitcoin price correlated to Grayscale unlock dates?

Grayscale Bitcoin Trust, the world's largest digital assets manager that allows institutional investors to gain indirect exposure in the Bitcoin market through its product, GBTC. Investors purchase GBTC shares directly via Grayscale in daily private placements by paying in either Bitcoin or the U.S. dollar.

Nevertheless, investors can sell their GBTC shares only after a six-month lockup period in secondary markets to other parties. Therefore, they anticipate liquidating at a premium when the market price at the time of sale crosses above the native asset value (NAV).

On the other hand, liquidating GBTC shares when the market price has dipped below the NAV brings losses. So, if investors decide to dump their GBTC holdings, they would have to do so for a financial casualty. That is because the share has been trading at a discount, i.e., under its NAV, since February 24, 2021.

Source: bybt.com/Grayscale

Some analysts, including strategists at JPMorgan, believe that accredited investors will sell at least a portion of their GBTC holdings after the July unlocking period, thus weighing further on the ongoing Bitcoin market downtrend. Nevertheless, other analysts believe that the event will flush sellers from the market in July, opening up both volatility and bullish potential to break new all-time highs.

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