Crypto Week: Bitcoin is Caving

Bitcoin prices are resting slightly above $26,000 per coin after a huge drop by 15% last week. Such a sharp drop was completely unexpected, as such a scenario had only 10% probability after 22 days of low volatility in the market. A similar scenario happened only once in November 2018, when the coin lost 15%, and extended is slide further down by 50% during the following month.

Onchain data demonstrates that 90% of short-term investors, who hold Bitcoin during the recent 155 days, have received losses. It means that they bought it at prices above $26,000 per coin. Bad news is that during similar scenarios in May and December 2021 the drop of Bitcoin prices continued beyond 15%, and it was extended to 35-40%. This also correlates with a November 2018 scenario that may become a nightmare for the market. If this would be the case, Bitcoin prices may drop to $15,000-17,000 per coin in September. The crucial support level is located at $23,000-25,000 per coin. It this level would be passed the worst-case scenario would be on the table. But before then Bitcoin has a good chance to rebound, if there would be a reason for such a recovery.

Wall Street Journal reported that Binance, the world’s largest cryptoexchage, has violated sanctions against Russia. WSJ claimed that Binance still handles “substantial” Russian Ruble trading volumes, helping clients transfer funds from sanctioned banks into balances on the platform via intermediaries. Binance denied any sanctions’ violation. The news push the Binance coin down by 7% to $202 per coin. Investors fear that WSJ report may nudge U.S. Department of Justice to take legal actions against Binance and it CEO Changpeng Zhao. There are no official confirmation of such an information, but if they would emerge it may send BNB coin to $140-180 per coin.