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Bitcoin drops to $37K after false rumors about Amazon

Bitcoin drops to $37K after false rumors about Amazon

Very bullish sentiment has been observed in the crypto market in recent days. For example, there were statements by Elon Musk at the event "The B-word" that Tesla might accept Bitcoin payments again in the future, but there was also a rumor that Amazon was going to accept crypto payments due to a job posting they made on their website.

Amazon is looking for a "Digital Currency and Blockchain Product Lead," or in other words, someone to start developing a strategy around cryptocurrencies and blockchain technology. But this news was blown up by an anonymous report from London's City A.M. newspaper, which claimed that Amazon will start accepting Bitcoin (BTC) as a form of payment by the end of 2021.

These two factors combined have caused Bitcoin and other cryptocurrencies such as Ethereum (ETH), Polkadot (DOT), and Chainlink (LINK) to surge over the past 7 days. Bitcoin even peaked above $40,000 last night, July 26, 2021, a price last seen more than a month ago.

Yet the price of Bitcoin and other cryptocurrencies plummeted late at night after an Amazon spokesperson put out the following:

"Despite our interest in the space, the speculation that has arisen about our specific plans for cryptocurrencies is not true. We remain focused on exploring what this might look like for Amazon’s customers.” So, the rumors that were raised by the London newspaper turned out to be false and that was immediately reflected in the price. Bitcoin made a free fall from $40,350 to $36,500, a drop of a whopping 10%. At the time of writing, the price is $37,290.

Still, this doesn't take away from the fact that Amazon is looking at blockchain technology and cryptocurrencies, so we can definitely expect something from the world's third-largest company.

Still bullish?

According to Élie Le Rest, partner at digital asset management firm ExoAlpha, the recently denied rumor that Amazon would accept cryptocurrency payments has the potential to have a similar effect to PayPal's 2020 revelation that it would integrate cryptocurrencies. Le Rest said that if the Amazon news ultimately proves true, it "could be the catalyst to ignite a bull run in the second half of 2021."

When the Bitcoin price rose above $35,000 on July 25, "more than a billion dollars worth of shorts were liquidated in 24 hours, with most of the liquidation taking place in less than 1 hour" according to Le Rest, who also said, "The current market movement could be supported during the week by large purchases coming from players who have been waiting since late May for Bitcoin to trend in a more directional direction."

Le Rest said: "To validate this directional trend, Bitcoin needs to break out of the $30,000-$40,000 range it has been stuck in for 2 months. Holding Bitcoin above the $40,000 level would signal that the bear market is over and the bull run can resume."

If Bitcoin can maintain its current momentum, le Rest concluded, "As many hope, Bitcoin could then get back on track with the Stock to Flow model and reach the $100,000 mark by the end of the year."

Luc Smits van Oyen
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