Bitcoin Rebounds to $58K After Midweek Slump: Is the Worst Over?

Bitcoin experienced a dramatic fall after hovering around the $60,000 mark earlier this week. The cryptocurrency broke through its support level on Wednesday evening, coinciding with the U.S. July 4th holiday, which led to a swift decline. By Thursday morning, Bitcoin had dropped to $56,750 but managed a modest recovery. Despite a final dip below $56,900 around mid-morning, Bitcoin’s price rebounded by 5% throughout the afternoon.

As of the latest update, BTC was trading at $58,158.80, reflecting a 3.30% loss over the past 24 hours.

Government Concerns and Market Reactions

This recovery eased concerns about potential selling pressure from Germany’s government and the anticipated Bitcoin sale from Mt. Gox. Market liquidations totaled $100 million, a relatively small amount compared to the $600 million liquidated last week when Bitcoin plummeted to near $54,000, its lowest point since February.

Meanwhile, Bitcoin ETFs have been notably active, with $438 million recently invested, pushing their total asset value to $49.3 billion. Trading volumes for U.S. Bitcoin ETFs on July 5 and July 8 were $2.18 billion and $1.98 billion, respectively, marking the highest levels since June 25.

Germany and Mt. Gox: Overblown Fears?

Despite initial anxieties about ongoing sell pressure from Germany and Mt. Gox, many experts consider these fears to be exaggerated. On Monday, the German government transferred $900 million worth of Bitcoin, followed by an additional $362 million to Kraken and other trading desks on Tuesday.

Ryan McMillin, Chief Investment Officer at Merkle Tree Capital, commented that the worst of Germany’s selling seems to be behind us. According to Arkham Intelligence, Germany has moved about two-thirds of its seized Bitcoin holdings, leaving approximately $1.6 billion remaining.

Future Outlook

While transferring funds to exchanges and market makers indicates a probable intention to liquidate, it does not confirm that Germany’s assets have already been sold. Plus, the bankruptcy estate of the defunct crypto exchange FTX is set to distribute approximately $16 billion in cash to crypto investors around September or October this year. McMillin noted that this cash distribution is expected to act as a “significant bullish catalyst” for the market in the coming months.

Read Also: Bitcoin Fee Plummets to 4-Year Low: What It Means for Miners and Investors

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