After holding steady above $60,000 for an extended period, Bitcoin recently tumbled below $58,000 in just 24 hours. That’s a gut-wrenching 3.8% drop, and it has analysts scrambling to understand what’s next for the king of cryptocurrency.
Here’s a closer look at the current situation and what might be in store for Bitcoin.
Bitcoin Hits a Two-Month Low
On Thursday morning, Bitcoin’s price fell below $58,000, hitting a two-month low. This decline comes during an unusually calm phase for the cryptocurrency, which had previously seen its price oscillate between $60,000 and $70,000. Amid rising fear and increased supply in the crypto market, bearish sentiment is growing.
As Bitcoin approaches its 200-day exponential moving average (EMA), the likelihood of a further breakdown seems higher than that of a reversal, particularly as trading volume surged by 55% in the past 24 hours.
What Low Volatility Tells Us
Despite the recent drop, Glassnode’s analysis indicates that periods of low volatility are often precursors to significant price movements. Historically, such phases are followed by notable changes in Bitcoin’s value.
What’s Causing the Bitcoin Slump?
Crypto analyst Wise Advice has provided insights into the factors behind Bitcoin’s recent decline:
Mt. Gox Distribution Looms Large
One major factor contributing to Bitcoin’s price drop is the upcoming distribution of nearly $9 billion worth of BTC by the defunct Mt. Gox exchange. With around 140,000 Bitcoins set to be distributed to creditors in July, there is a fear that these creditors might sell off a substantial portion of their BTC holdings.
Given that the price of Bitcoin was approximately $600 when Mt. Gox collapsed, these creditors stood to make substantial profits, which could pressure the BTC market.
Miner Sell-Offs Intensify
Another issue is the recent sell-off by Bitcoin miners. Since Monday, they have liquidated over $150 million worth of Bitcoin on exchanges. This selling pressure follows a decrease in daily miner revenue from $79 million to $29 million due to the recent Bitcoin halving event. To sustain their operations, miners are being forced to offload their assets.
Liquidations Fuel the Downturn
In the past 24 hours, approximately $231.9 million worth of long positions have been liquidated, further exacerbating Bitcoin’s price drop. This creates a vicious cycle of declining prices and increased liquidations.
Will Bitcoin Test the $50,000 Mark?
With the surge in supply and rising long-liquidations, the question remains: will Bitcoin’s bearish trend push the price below the $56,000 level and test the psychological $50,000 mark? On-chain data provider Santiment has noted significant sell-offs in both Bitcoin and altcoins, with prices hitting nearly two-month lows. Despite the upcoming arrival of spot Ethereum ETFs by July 15, Ethereum prices have also dipped below $3,200.
Santiment suggests that current market conditions might present a buy-the-dip opportunity. They recommend waiting for initial market enthusiasm to wane and for traders to become more skeptical and impatient before making new investments.
Read Also : Top 5 Reasons Why the Crypto Market is Bleeding Today
The coming weeks will be crucial for Bitcoin’s price trajectory. Stay tuned!
This news is republished from another source.
