Bitcoin (BTC) saw flash volatility into Monday’s Wall Street open as markets reacted to tech company Strategy’s new BTC sales.
Key points:
- Bitcoin reacts sharply to news that Strategy had sold nearly 3,600 BTC.
- A rebound during the US trading session failed to recoup more than half of the day’s losses.
- Strategy may reveal a compensatory BTC buy, an analyst suggests.
Bitcoin erases holiday gains on Strategy sale
Data from TradingView showed BTC/USD dropping to near $61,000, sparking daily losses of more than 4%.
BTC/USD four-hour chart. Source: Cointelegraph/TradingView
A rebound at the start of the US session pushed the price higher before settling around the $62,000 mark at the time of writing.
Strategy revealed that it sold 3,588 BTC through July 5 to fund preferred stock dividend payments and replenish cash reserves.
Commenting on the latest BTC price moves, X commentator Exitpump suggested that the Strategy news was the catalyst for an already weakening market.
“Bearish signs were there, posted about it yesterday, news about Saylor selling just triggered more dump,” they wrote.
“Funding is still pretty positive. That was it i guess. Short term bounce from 61.2k and then more dump imo.”
Exitpump referred to funding rates across exchanges, with a post on Sunday eyeing a buyer entity using a time-weighted average price (TWAP) method to add exposure.
“Once the TWAP buyer backs off, I wouldn’t be surprised to see a fast flush lower,” they wrote, anticipating a price ceiling at $64,000.
BTC chart with funding rate data. Source: Exitpump/X
Trader and analyst Rekt Capital appeared unsurprised by the behavior, reiterating similarities between current price action and the latter portion of the 2022 bear market.
“Generally, Bitcoin is doing the same exact thing now as it was doing in the Summer of 2022,” he told X followers.
An accompanying chart showed the 50-month exponential moving average (EMA) trend line potentially becoming new resistance, just like four years ago.
BTC/USD one-month chart with 21, 50EMA. Source: Rekt Capital/X
Analyst: Strategy may reveal more BTC buys
Others remained upbeat, with trader Jelle eyeing bullish divergences on weekly time frames on the BTC/USD relative strength index (RSI).
Related: $60.4K Becomes ‘most important area’: Five things to know in Bitcoin this week
“I have seen the $BTC chart look much worse than this over the years,” he argued.
BTC/USDT one-week chart with RSI data. Source: Jelle/X
As Cointelegraph continues to report, various onchain indicators have printed reversal signals absent since late 2022.
Crypto trader and analyst Michaël van de Poppe, meanwhile, suggested that Strategy itself could end up delivering a market rebound.
“The markets are reacting with a shock response to this news. $BTC drops, and it’s clearly valuing the potential impact that Strategy can continue to sell Bitcoin going forward,” he wrote on X.
“However, I wouldn’t be surprised to see a message in the coming days that they’ve been buying more $BTC than they’ve sold.”