As an experienced analyst, I believe that the recent sell-off in Bitcoin and altcoins is driven by a combination of factors. The news of Mt. Gox starting payments to its creditors in Bitcoin and Bitcoin Cash sparked fear among traders and investors, causing them to close their long positions and add to the selling pressure. Additionally, reports of large-scale sell-offs by governments, such as Germany and the US, have further exacerbated the situation.
On Friday, Bitcoin‘s value plummeted dramatically due to a large-scale sell-off. This selling frenzy ensued following reports that the defunct Mt. Gox exchange was making payments to its creditors. Consequently, investors hurriedly liquidated their open long positions, intensifying the market downturn.
The pressure exerted on the market extended to altcoins, resulting in Ethereum dropping below $3,000, Solana slipping under $135, and XRP reaching a low of $0.4.
With the cryptocurrency market awash in red, the total market capitalization took a nose dive, reaching a figure of $2 trillion. Should the selling pressure persist through the weekend, altcoins are expected to bear the brunt of the losses. The price of Ethereum may once again be put to the test at its support level of $2,500.
As a Bitcoin analyst, I’ve observed that the cryptocurrency halted its slide below $55,000 for now, providing temporary relief. Nevertheless, the extended daily candle wick reached as low as $53,545 on certain trading platforms.
At the point of releasing this examination, Bitcoin had rebounded to be traded at $56,430 on the market. However, according to CoinGecko statistics, there was a minimal decrease of 2.6% in the past 24 hours. Simultaneously, there was an augmentation of 38% in the trading volume, amounting to a substantial $55 billion.
Why Is Bitcoin Price Crashing?
Starting on July 5, the defunct cryptocurrency exchange Mt. Gox will initiate dispersing repayments to its creditors in the forms of Bitcoin and Bitcoin Cash. As stated by the Trustee overseeing the rehabilitation process, these payments will be executed through chosen exchanges.
According to a recent report from Arkham Research, on July 5th, a Bitcoin wallet linked to Mt.Gox transferred around 42,229 Bitcoins, which is equivalent to approximately $2.71 billion. Chinese blogger Wu Blockchain shared this information in a post.
As a researcher studying the cryptocurrency market, I observed a significant increase in anxiety among traders and investors upon hearing the latest update from the Mt. Gox Rehabilitation Trustee. The selling pressure intensified, causing Bitcoin to test its crucial support levels.
As an analyst, I’ve discovered that German government transactions significantly boosted Bitcoin sales in recent times. According to a report by Lookonchain on X, since mid-June, the German and US governments have collectively transferred 17,788 BTC, equivalent to approximately $1.08 billion, to cryptocurrency exchanges.
As an analyst, I’d rephrase that statement as follows: Based on data from Lookonchain, the combined holdings of the two governments amount to approximately 396,210 Bitcoin, equivalent to around $22.78 billion in value.
If the current selling trends carry on, investors should brace for ongoing market instability. As of now, the US possesses approximately 213,297 Bitcoins, while Germany has around 42,226, and Mt. Gox holds about 141,687 Bitcoins.
Beginning on June 19, a combined sum of 17,788 Bitcoin worth approximately $1.08 billion has been moved by the German and US governments, as well as MtGox.
In particular, the #German Government has transferred $BTC every day since July 1.
They hold 396,210 $BTC($22.78B) currently.
German Government, 41,226…
— Lookonchain (@lookonchain) July 5, 2024
Bitcoin Price Analysis: Recovery Incoming Or Burst?
From a fundamental standpoint, it’s looking like the sell-off will continue. In such cases, examining the asset’s technical aspects becomes crucial. According to the daily chart analysis, the short-term trend is bearish and could potentially drop down to $42,000.
As a researcher studying the Bitcoin market, I’ve identified a significant development: the formation of a double-top pattern. When Bitcoin surpassed the resistance level at $58,222, it broke through the neckline support concurrently with aligning with the 200-day Exponential Moving Average (EMA). This alignment served as confirmation of the established pattern.
According to CoinGape’s analysis, traders are inclined to boost their short positions in Bitcoin as its price hovers below the 200-day Exponential Moving Average (EMA). The bearish trend is further reinforced by a sell signal from the Moving Average Convergence Divergence (MACD) indicator.
As a crypto investor, I would interpret this as follows: The daily closing price of Bitcoin falling below the 200-day Exponential Moving Average (EMA) would underscore the sellers’ dominance over the market. Furthermore, the double-top pattern, which forms when there are two successive peaks at roughly the same price level with a trough in between, suggests a potential downside target of $42,000 if it breaks down.
If traders raise their buy orders at the present price level, $55,000 may act as a catalyst for a more significant trend change, pushing prices above $60,000 by the weekend.
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2024-07-06 09:12