Since the Bitcoin halving event, Bitcoin traders have been regularly scratching their heads about the future direction of the so-called digital gold. Over the past few days, the bitcoin price has experienced serious selling pressure, and on some exchanges, the price of one bitcoin did drop below the important price level of 60,000, which made many investors wonder what is really next for the crypto king as we are close enough to finish the first half of the year.

Bitcoin’s Price Action

Upon examining the price action of bitcoin since March, it is evident that it has remained trapped within a narrow range, fluctuating between 60K and 70K. On March 10th, the bitcoin price reached an all-time high of 73,812, and the sentiment was enormously positive, as traders had been eyeing the price level of 100K as a real potential target. However, in reality, the price action did nothing but move in the tight range described above, and yesterday the price fell to 58,371. Many traders believe that the bitcoin price must respect the important support level of 60K, as a violation of this price level could really open the floodgate for a more intense sell-off. This is because traders believe that if the price breaks this price point, then the next important support level will be near the important psychological level of 50K, and a break below this point could make traders push the price even further towards the 40K price mark.

Bitcoin Trading Chart By AvaTrade

The Important Break-Even Price Point 

Marathon Digital has identified 43K as a crucial breakeven price point for most miners after the halving event, which aims to decrease the reward for miners. However, there are other estimates that do suggest that the 43K price point is actually for those who are already in this area, and the real number is near 60K.

Why is the Bitcoin price going down?

Several factors have contributed to the current sell-off in the price action. On a fundamental level, the rehabilitation trustee of Mt. Gox—the Japanese crypto exchange that was hacked nearly 10 years ago—said recently that it would start repaying Bitcoin and Bitcoin Cash in July. Now, the sentiment in the market is that the month of July is going to be a difficult one for bitcoin, as many investors who had bitcoin at a fraction of the price would not waste time taking some profit off the table, which means that there will be more selling taking place next month. Speculators have used this sentiment as an opportunity to short the price action in anticipation of the event.

There is a genuine possibility that we could witness increased sales in the upcoming month, implying that the current sell-off may only be in its initial stages, with further potential for growth. But, at the same time, traders must keep in mind that this is not 2012 or 2015, when bitcoin was nothing more than just speculation. We have real and serious money involved, and sovereign funds like Qatar could also be buying it. Therefore, investors who would be receiving their bitcoins back may decide not to sell at all, as they, like most others, may view the $100,000 target as the real target and prefer to wait a bit longer before making a profit.

In addition to the above, there are other reasons behind the current sell-off that market gurus do say are behind the current sell-off, such as the lack of clear direction of a dovish monetary policy from the Fed, i.e., not cutting interest rates sooner than expected, which is keeping the bitcoin price lower. Some argue that the volume in Bitcoin ETFs has also decreased, which is indeed a reality. However, it's worth noting that we are currently in the summer season, a time when the market typically experiences a slight decrease in volume.

So choppy, bullish, or seriously bearish?

Now, if we factor in the current price action, the breakeven price, the Mt. Gox event, the monetary policy stance by the Fed, and the cooling off effect in the Bitcoin ETF, most flags would be pretty red—meaning that there could be more sell-off on our door step when it comes to the price action. However, the choppy bullish argument does provide hope for the bulls, as the next big catalyst for the Bitcoin price is the US election and re-appointment of Donald Trump in the president's office. Additionally, the market continues to witness an increasing number of holders, as institutional money has just begun to participate in this domain, and their involvement is expected to intensify if the price of Bitcoin drops.