Bitcoin (BTC) has hit a roadblock in its bullish journey of 2024, facing setbacks fueled by reversing flows into spot BTC ETFs. The recent trend suggests a bearish trend as over 140,000 Bitcoins are set to flood the market, amplifying the ongoing sell-off concerns triggered by the Mt. Gox antiquated Bitcoin sell-off.
Here’s the story.
One of the looming shadows over Bitcoin’s price stability is the impending sell-off of Bitcoins by Mt. Gox, anticipated to commence in July. Analysts from JPMorgan indicate that this could exert initial downward pressure on prices, with recovery potentially expected by August. The situation is further complicated by the influx of $11 billion in fiat compensation to FTX creditors, a portion of which may find its way back into the market.
Looking at past events like Gemini Earn creditors, who liquidated part of their crypto assets depressed crypto price since May 29. JPMorgan’s bitcoin futures position indicator, based on CME futures, suggested that retail customers, rather than institutional investors, have been primarily selling off their crypto holdings.
In the meanwhile, Mt. Gox creditors are set to receive 142,000 bitcoins, worth around $9 billion at current prices, from July to October. Despite the October deadline, JPMorgan analysts believe most repayments will occur in July. This could lead to further market pressure in July, with a potential rebound from August onwards.
Looking ahead, FTX creditors are set to receive substantial cash repayments estimated between $14 billion and $16 billion post the approval of their wind-down plan in October. Unlike the previous in-kind repayments to other creditors, these cash injections could inject positive momentum into crypto markets as recipients consider reinvesting in digital assets.
The recent market reaction has been swift and severe, with Bitcoin witnessing a 7.5% correction, slipping below the $61,000 mark as of June 27, 2024, settling at $60,720. As July approaches, investor attention remains fixated on whether Bitcoin will experience a resurgence or plunge further into uncertainty by month’s end.
Also Read : Bitcoin Price Prediction: No Confirmation Of Volatile Shifts; Here’s When Serious Fireworks Will Begin
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