Bitcoin Drops 1.33% to $106,177.46 Amid US Spending Bill Concerns

Bitcoin, the leading cryptocurrency by market capitalization, experienced a decline on Tuesday, falling below the $106,000 mark. This drop occurred as the cryptocurrency faced resistance at the $108,000 level, a significant barrier that has capped its upward momentum. The broader cryptocurrency market also saw a downturn, with a 1.59% decrease to $3.27 trillion. The Coin Market Cap crypto fear and greed index remained neutral at 50, indicating a lack of strong sentiment in either direction.

Bitcoin's price dropped to $106,177.46, a 1.33% decrease from the previous day. This decline coincided with a cautious mood in the US financial markets, which were also down due to concerns over a new spending bill passed by the US Senate. The bill, which includes a $3.3 trillion tax cut, has raised worries about the US's fiscal deficit. Bitcoin has been consolidating below the $108,350 resistance level, which aligns with the upper boundary of its current trading range. Technical indicators suggest a potential bearish divergence, which could signal a reduction in the upward momentum of the recent rally. If selling pressure increases at this level, the price could revert towards the lower boundary of the trading range, approximately $100,960.

Bitcoin's inability to sustain a move above $108,350 has resulted in the formation of a potential lower high, aligning with a bearish price structure observed over the past several weeks. The $108,350 level has proven to be a notable barrier, with multiple price rejections confirming it as an area where supply has been dominant. Without a decisive breakthrough above this level, the price is more likely to continue trading within its established range. A bearish divergence has been noted, characterized by a slight increase in price while the Relative Strength Index (RSI) shows weakening momentum. This pattern suggests that the recent upward movement may have been driven more by short-term factors than by sustained buying interest. Trading volume has shown a consistent decline during this period of consolidation, reinforcing a bearish outlook. For a significant upward breakout to occur, a corresponding increase in volume would typically be required to confirm a shift in demand. Without such confirmation, the price may be more likely to decline and test subsequent support levels, including the point of control and potentially the value area low at $100,960.

Current data points indicate Bitcoin is encountering resistance at approximately $107,565, aligning with a pivot point, and also at the 23.6% Fibonacci level around $107,664. The emergence of a bearish divergence is further supported by the Relative Strength Index (RSI) at 54.4, which, while neutral, shows a downtrend from 56.1 yesterday. Concurrently, the Moving Average Convergence Divergence (MACD) histogram, at +269, suggests that bullish momentum may be decelerating despite remaining positive. Another event that shook some confidence for Bitcoin holders is that Microstrategy, one of the strongest corporate backers of Bitcoin, transferred $796 million worth of BTC to three new wallets. Blockchain analysis platform Lookonchain said 7382 BTC was transferred on Sunday, but no official explanation has been given. The question that arises in the mind of BTC investors is whether Michael Saylor, who has been a strong advocate of BTC, has now started selling his positions. Microstrategy remains the largest corporate holder of Bitcoin with holdings of 592,345 BTC, equivalent to about $64.28 billion.

The altcoin market capitalization fell to $1.29 trillion from $1.32 trillion in the previous day. CoinMarketCap’s altcoin season index fell from 21 yesterday to 20 today, deeply affirming the strength of the Bitcoin season. Ethereum fell by 2.20% to $2,430.75 at the time of writing. Solaxy (SOLX), Hashflow (HFT), and Maverick Protocol (MAV) were the top gainers. SOLX rallied by 77%, HFT popped 40% while MAV gained 14%. Solaxy, which was listed on Uniswap on June 24, had a strong start, but faltered after that. The layer 2 network on the Solana chain exhibited strong movement on Tuesday. Hashflow gained due to its Solana integration and Binance listing, which boosted its accessibility and credibility.