Bitcoin price drops below $ 34,000 as Grayscale’s giant BTC unlock day approaches

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Bitcoin (BTC) fell to a local low of $ 33,750 on June 20 as fears about low support levels proved to be well founded.

1 hour BTC / USD candle chart (Bitstamp). Source: TradingView

Data from UKTN Markets Pro and TradingView showed BTC / USD rapidly falling below $ 34,000 on Sunday after choppy behavior at the start of the weekend.

Resistance to near $ 40,000 continued to decline, with low volumes highlighting little interest in protecting price action well above $ 30,000.

Binance’s backlog data confirmed this on that day, with sellers knocking out a major buy wall above $ 36,500 to leave the next significant support level at just $ 31,000.

BTC / USD buy and sell orders on Binance as of June 20. Source: Material Indicators / Twitter

Among traders, much of the discussion revolved around the so-called “death cross” on the BTC / USD daily and hourly charts that occurred on Friday. This refers to the 50-day moving average that exceeds the 200-day moving average, and is traditionally seen as a bad omen for price stability.

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Historically, not all death crossovers have resulted in losses – as UKTN reported, some are followed by bullish phases.

‘A death cross is overrated,’ popular Crypto trader Ed abstract earlier in the week.

“The only thing that tells you is that you are very late when opening the shorts. Most of the down movements are already happening before the center.”

In one separate commentBlockstream CEO Adam Back also blamed Twitter users for the negative bias given to the death crossover events.

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1-day BTC / USD candle chart with “death cross” displayed. Source: TradingView

At the time of writing, however, Bitcoin was nonetheless trading down 5% on the day, while the 3-day losses totaled over 14%.

Closeouts were piling up on the stock exchanges, with nearly $ 150 million in positions vanished in a single hour after a flash drop of around $ 800.

Grayscale investors have a selling opportunity

Another theory on the price direction implied an impending “unlock” phase at institutional giant Grayscale.

As UKTN previously noted, the coming weeks will see a large chunk of investor funds released after a 6-month lock-in period, so selling pressure may increase as accredited investors seek to make up some of their losses ( made after the sale of their GBTC shares) by selling BTC on the spot market.

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Subsequently, on the other hand, there should be a significant lack of activity on the seller side.

Grayscale unlock event graph. Source: Bybt

Fundamentals see increasing retracement

A look at the fundamentals of the network gave an additional source of concern. The hash rate, already evolving thanks to changes in the distribution of miners, has fallen below 100 exahashs per second (EH / s) after previously peaking at 168 EH / s.

Related: Bitcoin Could Lose $ 30,000 Price Point If Stocks Build Up, Analysts Warn

Other estimates, while inaccurate, also described the downward trend in the hash rate.

Bitcoin 7-day average hash rate graph. Source: Blockchain

The difficulty, fresh out of two consecutive downward adjustments, was on track for a third leg down about 9.7% to the next in about nine days.

The last time Bitcoin saw three downside difficulty adjustments in a row was during the surrender phase of the previous bear market in late 2018.