Bitcoin price falls below $30,000 as macro and regulatory concerns take center stage

Several pieces of data indicate that Bitcoin price is falling below $29,000 in the near term.

Yes, you read that right.

Let’s take a look at the major issues contributing to the current Bitcoin price decline.

Bitcoin (BTC) struggled to break above $31,800 on July 13, leading to a 6.3% correction to $29,700 on July 17. was last observed on June 21.

On the derivatives side, Bitcoin futures are showing increased demand, but Asian markets are slowing.

Quarterly Bitcoin futures typically trade at a slight premium to spot markets, reflecting sellers’ desire to receive more money in exchange for delayed settlement. Healthy markets typically feature BTC futures trading at a 5% to 10% annualized premium, a situation known as contango, which is not unique to crypto markets.

Bitcoin 3 month futures premium. Source: Laevitas

Between July 14 and July 17, BTC futures maintained a neutral to bullish premium of 7%, breaking through the 5% threshold. This suggests moderate conviction among the bulls after the failed attempt to break above $31,800.

However, the Tether (USDT) premium in Asia has declined. The stablecoin premium serves as a demand indicator for China-based retail crypto traders, measuring the difference between peer trades and the US dollar.

Tether (USDT) peer-to-peer against USD/CNY. Source: OKX

Tether premium in Asia recently hit a 1.8% discount, marking its lowest point in more than six months. This reverse trend in premiums began on July 12 and has continued to widen, indicating moderate selling pressure.

Regulatory Concerns Continue to Plague Crypto

Regulation of the crypto industry is also always on the minds of investors. Even though the July 13 ruling that the sale of XRP (XRP) through exchanges and over-the-counter desks did not violate securities regulations boosted the markets, the court ruling did not definitively determined whether the initial coin offering of XRP was classified as a security offering. . This lack of clarity has left some investors uneasy, as it raises the possibility that other cryptocurrencies also face potential title designations.

Along with the XRP court ruling, Binance also announced the layoff of 1,000 employees. Although the exchange has refuted the reports and claimed routine resource reallocation and ongoing hiring, concerns have arisen over Binance’s future following the departure of several key executives and ongoing legal action. the Securities and Exchange Commission.

Related: SEC vs. Ripple referred to judge who ordered release of ‘Hinman documents’

Macro Trends Do Not Favor Crypto

The macroeconomic environment has not been favorable for Bitcoin and risk assets. China’s gross domestic product growth slowed to 6.3% in the second quarter, below market expectations, factors including the ongoing trade war with the United States and government efforts to reduce debt contributing to the slowdown.

Given the external factors and pending court rulings that could negatively impact the two largest exchanges, the odds of Bitcoin falling below $29,000 have increased. This creates a favorable scenario for the bears, causing the $30,000 resistance to strengthen.

Bitcoin price could drop below $29,000 this week

There does not appear to be any specific catalyst limiting Bitcoin’s upside potential, other than deteriorating macro conditions and indications of further interest rate hikes by the Federal Reserve in 2023.

From a trading perspective, BTC futures are showing greater confidence among professional traders using leverage. However, selling pressure from retail investors in Asia is limiting the overall rise in cryptocurrencies.

This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.