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    Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Crypto Market Crash: Time to Buy the Dip, or Brace for Impact?

Story Highlights
  • Bitcoin price fell below $58,000 for the first time in 2 months, analysts fear a further drop.

  • Possible reasons include upcoming Mt. Gox BTC distribution, miners selling and long positions liquidation.

  • Some analysts view the drop as a buying opportunity and recommend waiting for market impatience before investing.

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.

Hereโ€™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, Bitcoinโ€™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, Glassnodeโ€™s analysis indicates that periods of low volatility are often precursors to significant price movements. Historically, such phases are followed by notable changes in Bitcoinโ€™s value.

Whatโ€™s Causing the Bitcoin Slump?

Crypto analyst Wise Advice has provided insights into the factors behind Bitcoinโ€™s recent decline:

Mt. Gox Distribution Looms Large

One major factor contributing to Bitcoinโ€™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 Bitcoinโ€™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!

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