Bitcoin climbed above US$60,000 for the first time last weekend after President Joe Biden signed the US$1.9 trillion pandemic-relief bill into law, but dropped below that mark Monday morning.
The $60k price range proves to be the biggest resistance to Bitcoin since last summer when we struggled breaking $12k for a few months, if you remember.
Since then we were on a steady and often speedy run up to the current rates. But it seems that two factors play into this latest drop.
First, there are many reports about whales selling right now – this comes from several wallets with over 1000 BTC selling in the past days.
At the same time, buyers volume has declined. This is exactly how price drops – demand becomes less than supply.
Apparently, retail investors have purchased over 187,000 bitcoins so far this quarter, compared to roughly 205,000 last quarter, according to a report by JP Morgan. Meanwhile, institutions have bought about 173,000 BTC over that time frame — as gathered by bitcoin futures, fund flows and company announcements — after buying nearly 307,000 in the last quarter of 2020.

These stats suggest that flows into bitcoin are becoming more balanced after institutions dominated late last year but also, that we see an overall lower volumes compared to last year’s figures, which is also understandable, most of the institutional purchases are by the same players – Microstrategy, Square, Grayscale and the odd one this year was Tesla.
Grayscale reportedly were offering discounted rates for their BTC contracts over the past few weeks, which prompted the all-time Bitcoin hater Peter Schiff to gloat about the declining interest in Bitcoin.

At the same time, we see draconian anti-crypto measures taking place in China and India, with the latter facing a complete ban on Bitcoin and all other cryptocurrencies in the making. This will be not only on trading, but also on even owning and holding cryptocurrencies. Such is the desperation of the ruling party of India to stop their citizens from their chance to enrich themselves and it’s also an attempt at creating an unfair competition, or shall I say, block any possible competition between crypto and the soon-to-be-launched state-issued digital currency, which is also the case with China. Both countries are among the first to impose CBDCs (central bank digital currencies) to their population and these currencies will be no different to their already weakened fiat currencies, which people have no interest in.

The reason CBDCs are an appealing alternative to cash is obvious: transparency. State-issued digital currencies will provide an absolute traceability for every transaction and this goes hand-in-hand with the ever-increasing surveillance that most governments pursue in current times.

While many other countries are still not ready with their own CBDCs, the first steps have been taken and since 2019, we saw a lot of anti-privacy regulation come into effect. Privacy coins like Monero, Zcash, ZEN and many others were forcefully delisted from a number of exchanges in Australia, US and some European-based exchanges. This was in response to nothing else but regulatory pressure. I first reported about this in this article back in 2019 but there have been more delistings since.

At the same time as the ban on crypto in India is being prepared for a roll-out, the interest in Bitcoin from that region is at an all time high. It is currently ranking the second country with the most searches for the terms crypto or bitcoin (804,000 in the past year), only falling behind the US which leads with 2.6 million, according to  a recent report by

Third is the UK with an average of 648,000 online searches, then we see Indonesia (324,000), Canada (300,000), Vietnam (276,000), Australia (273,000), Nigeria (192,000), the Philippines (144,000) and Thailand (132,000) round up the top 10.

So, interest in Bitcoin and crypto in general is still high, but with soaring prices, we see a decline in the purchasing power, which makes sense.

What does that mean for the price of Bitcoin?

In the short term, we can expect Bitcoin to continue its sideways move, possibly falling to lower support levels as marked in the screenshot below. March is known to be a difficult month for Bitcoin, with 8 out of the last 10 years printing negative returns, so I wouldn’t be surprised if we fail to take the next leg up until April. However, this doesn’t cancel the bull run in the larger time-frames. Also, it only takes one huge institutional purchase, like the rumoured Twitter or Apple, that will make the headlines all over again, and we will see a new buyers’ FOMO that will catapult Bitcoin and the rest of the market above current resistance levels in no time.

Meanwhile, we are consolidating around the $55-56k support level which is holding strongly so far. Consolidation is a healthy market performance as it establishes key support levels and shakes out the “weak hands” from the market, giving more power to those who know how to play the markets. This should be us – myself and you, my loyal readers, who can make better decisions on how to navigate their investments by keeping well-informed and always up to date.

Trade responsibly and stay profitable.

4 thoughts on “Why Bitcoin Struggles to Break above $60k

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