- Schiff warned that hedge funds selling Bitcoin to cover MSTR shorts could crash the price of Bitcoin.
- Bitcoin faced bearish trends and showed red candles on the daily and weekly charts.
Bitcoin [BTC] Bulls are struggling to reverse bearish sentiment as the cryptocurrency showed red candles on the daily and weekly charts.
The volatility of the King Coin, which stood at $65,177.67 at the time of writing, has attracted a lot of criticism lately, especially from Peter Schiff.
In a June 17 X-post (formerly Twitter), Schiff noted:
Source: Peter Schiff/X
Schiff on Bitcoin and MicroStrategy
Here, Schiff underlined the interconnected risks between Bitcoin and Microstrategy [MSTR]highlighting potential cascading effects on both assets.
Furthermore, when an X user – Jim – asked, “Why would Bitcoin crash?”, Schiff responded:
“Hedge funds are selling while buying MSTR. They would handle both sides of the spread.”
Schiff’s statement suggests that Bitcoin’s price could crash if hedge funds sell their Bitcoin holdings and buy MSTR to close their short positions.
However, some confusion remains as to why hedge funds will sell their Bitcoin holdings even if their MSTR short positions produce profits.
Schiff’s comments lack substantial support
Amid Bitcoin’s ongoing price struggle, BTC ETFs are also facing similar challenges. From June 13 to 17 (excluding weekends), BTC ETFs experienced consecutive outflows.
Source: Farside Investors
Additionally, MicroStrategy’s stock MSTR also fell 3.13% over the past 24 hours.
However, with the Relative Strength Index (RSI) near the neutral zone, it is uncertain where the MSTR will go in the near future. If it manages to surpass the resistance level at $1607.8, bullish momentum could potentially follow.
Source: TradingVIew
This underscored the strong interconnection between the two markets, indicating that MicroStrategy’s (MSTR) price action is following Bitcoin’s movement.
Bitcoin is strong
AMBCrypto’s analysis of social volume and 24-hour active addresses revealed a significant increase, indicating that despite recent price declines, investor sentiment towards Bitcoin remains positive.
Echoing a similar sentiment, YouTuber Crypto Rover analyzed:
“Once this bearish wedge breaks out on #Bitcoin, the price target is $72,000.”
Source: Crypto Rover/X