Despite All of the Positive Signs of Increasing Liquidity, What Is Causing the Bitcoin Price Drop?

The post Despite All of the Positive Signs of Increasing Liquidity, What Is Causing the Bitcoin Price Drop? appeared first on Coinpedia Fintech News

The Bitcoin price soared above $40,000 after dwelling below those levels for a couple of days. The rebound has increased optimism around the BTC price rally, while the inflow of liquidity remains restricted in certain regions. With this, market sentiments are slowly slipping down from the neutral ranges, which were greedy a few days ago. However, the fundamentals of Bitcoin indicate the token will remain under bullish influence in the long term.

The Bitcoin hash rate, which calculates the computational power required to validate a transaction, has been marking new highs. Besides, with the launch of the spot Bitcoin ETF, Wall Street adoption has also increased. With the Bitcoin halving fast approaching in April, the upcoming FED rate cuts may positively impact the price.

Despite all the positive signs of liquidity incoming, why is the BTC price consolidating within a narrow range? What is causing the dump?

As per the reports, Grayscale is selling its GBTC shares to avoid a discount penalty on its net asset value (NAV) since it closed back to 0%. Secondly, FTX’s bankruptcy estate is dumping around $1 billion worth of GBTC since its conversion to an ETF, which has increased selling pressure.

FUDs like Mt.Gox, Silk Road, etc. have been hovering, which has been affecting the weak handholders. What’s next for the BTC price rally?

As mentioned above, the BTC price is following a pattern of forming a constant lower high and lower low. Currently, the price has surged above $41,000 and is trying to rise above the crucial resistance at $41,600. The RSI has also rebounded from the lows, which suggests a healthy upswing could be imminent. Besides, the MACD is displaying a drop in selling pressure but has not waned.

Therefore, the current upswing may face a barrier that may cause a pullback as the buying volume has failed to surpass the selling pressure.