The price of Bitcoin has ranged between $29,500 and $32,000 since late June as investors await a potential upside breakout after multiple institutional spot ETF applications. However, one analyst claimed approval of BlackRock's filing "is a long shot."

The world's largest cryptocurrency dipped below the $30,000 mark on Friday — falling 1.2% to $29,876.12 at 9:00 a.m. EDT, according to CoinGecko.

Bitcoin research lead at CoinShares, Chris Bendiksen, sees a trifecta of challenges causing the digital asset's current stagnation. 

BlackRock's spot Bitcoin ETF filing

The first challenge noted by the analyst was buyer exhaustion. "There has been buyer exhaustion after the rally caused by BlackRock's spot Bitcoin ETF filing," Bendiksen told The Block.

BlackRock's June 15 filing sparked a Bitcoin rally where the digital asset surged above $30,000. BTC has stagnated at that level for the past month. "However, while Blackrock has made some amendments to their filings and Coinbase has partnered with CBOE for a surveillance-sharing agreement, we still think a spot ETF approval is still a bit of a long shot," he added.

He highlighted how the U.S. Securities and Exchange Commission has repeatedly said they want surveillance agreements with markets carrying a "significant" amount of bitcoin volume. The analyst outlined this as an obstacle to spot ETF approval. "We don’t know what "significant" exactly means, but the majority of bitcoin spot volume is on exchanges outside of the U.S., where the SEC can have little hope of oversight," he added.

However, the analyst said public comments by Larry Fink, BlackRock's CEO, have lent considerable momentum to Bitcoin. "Having Larry Fink sit on the major financial news networks talking positively about Bitcoin is beneficial in and of itself," Bendiksen asserted. He added the lead-up to the Bitcoin halving will draw substantial media attention and "reiterate the strength of Bitcoin’s rock-hard monetary policy."

Potential DOJ action against Binance

Bendiksen said the second challenge to Bitcoin breaking out of its current range was U.S. authorities turning their attention to Binance. "The overhang from a potential DOJ action against Binance is causing stagnation," Bendisen said.

In early June, two U.S. lawmakers — senators Elizabeth Warren and Chris Van Hollen — alleged in a letter that Binance may have lied about Binance.US being an independent entity. Bloomberg reported the letter to U.S. Attorney General Merrick Garland alleged the crypto exchange may have made false statements.

The request to the U.S. Department of Justice came after the SEC filed a suit against Binance and its CEO Changpeng Zhao. The SEC filing alleged Binance had listed unregistered securities, commingled customer and company funds, and that Zhao was "secretly" controlling Binance.US.

Rotation into alts after XRP ruling 

Bendiksen said the third challenge to Bitcoin's upward trajectory is the "recent rotation into altcoins after the XRP summary judgement."

Following Ripple's partial legal victory against the SEC, Bitcoin's market dominance fell below 50%. The decline in dominance came as altcoins took more ground from the digital assets market share.

After the Ripple ruling, XRP jumped 73% to become the fourth-largest crypto asset. Other altcoins — like Ethereum, Cardano, Solana, Polygon, and Stellar — also saw double-digit growth.

Macroeconomic outlook

Traders are cautiously eyeing the upcoming Federal Reserve meeting and an anticipated interest rate hike, potentially the last of the cycle. The tech-heavy Nasdaq suffered a 2% drop on Friday, down 294.71 points, its most significant drop since March. The dollar, on the other hand, has been performing well. At the start of the week, the U.S. Dollar Index DXY was trading around last week’s lows. However, in the last two days, the DXY has reversed higher, crossing the 100.00 point mark.

Traditionally, Bitcoin shares an inverse correlation with the US Dollar Index (DXY). "We think that weakness in the dollar over time should have a positive effect on the bitcoin price, but it might take more time for that effect to be visible from under the shorter-term ebbs and flows of the market," Bendiksen said.