Why Is Bitcoin Price Going Down Today?

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As a seasoned researcher with extensive experience in the crypto industry, I have witnessed firsthand the volatile nature of Bitcoin price and how external factors can significantly impact its trajectory. The recent downward trend of Bitcoin price, which saw a 1% drop in the last 24 hours, is a result of several events that have unfolded in the past few weeks.

The price of Bitcoin has taken a dip in response to recent industry developments, leading to a shift in investor sentiment. In just the last 24 hours, the cryptocurrency’s value dropped by approximately 1%. Consequently, its weekly growth rate, which had earlier recovered to 1.6%, has been curtailed. At present, Bitcoin is being traded at $66,418, with some liquidations taking place during the previous trading session. The debut of the spot Ethereum ETF is believed to have contributed to this price movement.

Bitcoin Price Hindered By Mt Gox Repayments

The price of Bitcoin recovered and reached $66,000 again following German asset sales, but now faces renewed pessimism due to bankrupt crypto exchange liquidations announced in June. Payments from these liquidations have commenced, with significant Bitcoin transactions on the Mt Gox blockchain leading industry discussions.

On July 24, Mt Gox transferred approximately 37,477 Bitcoin worth over $3 billion from its reserves, as identified by the on-chain analysis firm Arkham Intelligence. A day prior, Kraken announced initiating repayments to creditors following the receipt of around 48,641 Bitcoin from the Mt Gox Trustee. In all, the insolvent exchange is set to distribute approximately 140,000 Bitcoin to its creditors, raising significant worry among Bitcoin holders.

The apprehension causing a decline in market optimism arises from the anticipated sale of assets, which could significantly affect the market. Creditors handling decade-old assets feel uncertain due to the asset’s price surge. However, the broader adoption and institutional demand following the approval of Bitcoin spot ETFs pushed the price past $73,000 to a record high. Although the price has corrected to around $66,000, some creditors are eager to sell their assets while others plan to keep them.

The drop in Bitcoin’s price may be attributed, in part, to Hong Kong’s debut of its first Bitcoin futures inverse product. This financial instrument yields profits from falling asset values and represents an expansion of crypto-related offerings in the city. Consequently, heightened investor activity within this product could intensify selling pressure on Bitcoin.

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Is a Rebound On The Cards? 

Following the German sales, several industry analysts are optimistic about a potential rebound for Bitcoin. Institutional investors’ increased involvement could drive up the price by pushing it past resistance levels. Furthermore, some traders anticipate similar positive signs as they encourage institutions to buy Bitcoin directly from sellers.

The co-founders of Glassnode, Jan Happel and Yan Alleman, who go by the pen name Negentropic, shared on X (previously known as Twitter), that despite the dip in Bitcoin prices in June due to German liquidations and Mt. Gox transactions, the Bitcoin Fundamental Index (BFI) began to rise. This uptrend suggests that the network’s fundamentals are growing stronger.

As a researcher, I would express it this way: With the anticipated listing of spot Ethereum ETFs in the US markets, traditional investors are poised to seize a fresh investment opportunity. The potential interest rate reductions by the Federal Reserve may serve as a catalyst, paving the way for an upward market trend.

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2024-07-24 15:04