The cryptocurrency market has experienced a third consecutive day of negative price activity, reflecting growing negative sentiment. The market’s overall value dropped by $90 billion to $2.17 trillion, marking a 3.67% loss in the past day. Bitcoin, the market leader, saw a decline of 3.27% to $58,067.63 within 24 hours, having previously fallen 3.6% to $60,490 on July 1 due to selling pressure and actions by the German government.
The pressing question on everyone’s mind is whether Bitcoin has embarked on a long-term downtrend or if this is merely a temporary setback.
According to Wise Advice, a crypto analyst, the market has been declining for several reasons, including massive withdrawals, liquidations, mining activity, government actions, and market sentiment indicators.
Another outflow hit the BTC ETF on July 3. In altcoins, a crypto whale sold millions of dollars worth of coins, sustaining significant losses. The premier blockchain analysis tool Lookonchain said that this whale or institution sold 3.13 million LDO tokens for $5.77 million, 49,771 AAVE tokens worth $4.54 million, 269,177 UNI tokens worth $2.41 million, and 250,969 FXS tokens worth $708,000.
The market has also been hit hard by rising liquidations. Just yesterday, BTC liquidations reached $14 million, but today, this figure surged to $36 million. These large-scale liquidations have triggered widespread sell-offs, further driving down BTC’s price.
Currently, BTC miners’ capitulation is among the major factors contributing to the falling prices. The mining community is under strain due to a persistently low hash rate leading to decreased earnings. Consequently, many miners are selling their BTC to maintain operations or switching to other proof-of-work tokens to sustain profitability.
The actions of the German government have added to market fears. Recently, the government has been moving BTC around, causing panic among investors who are preemptively selling their holdings in anticipation of potential market impacts, despite the government not having sold any coins yet.
Bearish Market Sentiment
The overall market sentiment has turned bearish. A chart tracking Bitcoin flows in spot and derivative exchanges currently shows a negative outlook, with red indicating bearish sentiment and green indicating bullish sentiment.
Moreover, Bitcoin lost several key support levels in June, suggesting a midterm bearish trend. The focus is now on maintaining support above $60,000 as the weekly Relative Strength Index (RSI) approaches 50. Analysts warn that if bearish sentiment continues, Bitcoin could drop to around $48,000 before potentially rebounding, marking a critical test of its resilience amid ongoing market turbulence.
Read Also: Here’s How Low Bitcoin Price Can Go? Top Analyst Weighs In
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