First, the government in China is finally making headway in their assault on Bitcoin. See my article on the rise and fall of Bitcoin in China. At the moment, the Chinese are selling more than they are buying, and this is contributing to the recent fall in the price of Bitcoin. Some have stated that China is not the reason for the recent fall in the price of Bitcoin. However, with 50 percent of the volume, China is always a significant factor in a rise or a fall in the price of Bitcoin.
Second, the European Banking Authority (EBA) published an opinion in early July, addressed to the EU Council, European Commission and European Parliament, stating that banks and financial institutions should ignore virtual currencies, until more regulation is in place. The EBA is discouraging financial institutions from buying, holding or selling virtual currencies. While the EBA is not as powerful as the People’s Bank of China, the pronouncement of the EBA is discouraging news.
Third, as more retailers are beginning to accept Bitcoin as payment in the United States, this leads to more selling than buying. Due to the volatility of the price of Bitcoin, retailers typically do not hold Bitcoin; rather, retailers tend to sell immediately Bitcoin for fiat currency. In the US, this means that as customers use Bitcoin to buy products and services, this results in sell orders to convert Bitcoin into dollars.
Despite the fact that the DISH network and Dell announced that they will start accepting Bitcoin as payment, this good news did not have a significant impact on the price of Bitcoin. The short-term outlook for Bitcoin is bearish.