As a seasoned researcher with a background in financial markets and cryptocurrencies, I’ve witnessed Bitcoin’s volatile nature firsthand over the past few months. The recent turmoil, which began in late May when Bitcoin plunged by more than 15%, was a stark reminder of its inherent risk and unpredictability.
Over the past six turbulent weeks beginning in late June, Bitcoin experienced a significant drop, falling more than 15%. However, currently, the situation is improving. The value of the coin is rising steadily as indicated by new highs being set above $62,000 on the price charts.
Bitcoin Shaking Off Weakness
As an analyst, I’ve been closely monitoring Bitcoin’s on-chain metrics using data from CryptoQuant. Based on my analysis, it appears that Bitcoin is showing signs of turning the corner. The potential for further gains in the upcoming weeks or months cannot be ruled out. From a technical standpoint, we are currently witnessing a bullish breakout formation. A decisive close above $60,000 would significantly boost investor confidence and potentially accelerate this trend.
Over the past few weeks, Bitcoin optimists have faced a formidable challenge in the face of pervasive fear, uncertainty, and doubt (FUD) headlines. Among these developments, the German authorities’ announcement of selling 50,000 BTC, equivalent to billions of dollars, significantly dampened investor morale.
The predicament took a turn for the worse when it was announced by Mt. Gox creditors that they intended to distribute coins in July instead of October as previously expected. Subsequently, Kraken reportedly informed its recipients that they would be distributing Bitcoin from Mt. Gox within the coming days as of July 16th.
In the second half of June, Bitcoin’s prices saw a significant decline culminating in a massive sell-off at the beginning of July. This price plunge led to net redemptions for Bitcoin exchange-traded funds (ETFs). Unlike earlier periods where investors were eagerly buying spot ETF shares, the market downturn resulted in some shareholders choosing to cash out, thereby intensifying the price drop.
Around the same period, the Federal Reserve of the United States announced that they would reduce interest rates on just one occasion this year instead of the three times forecasted by economists. Consequently, with interest rates staying above the anticipated level, this development turned out to be unfavorable for riskier assets such as Bitcoin and cryptocurrencies.
The Major Turnaround: BTC Trading At A Premium, Miners Relieved
Despite occurring over the weekend, the situation took a turn. According to the analyst’s perspective, the assassination attempt against Donald Trump may have boosted his chances of reclaiming the presidency from Joe Biden. Trump has shifted his stance on Bitcoin and cryptocurrencies, even advocating for mining operations in the United States.
Over the weekend, the takeoff is anticipated, following a surge in liquidity, particularly for prominent stablecoins such as USDT and USDC. Concurrently, analysts have pointed out that short-term investors who held positions saw gains once the price surpassed $62,700.
Miners now earn more as prices increase, moving them out of the “extremely underpaid” bracket. Consequently, there’s less motivation for miners to offload their holdings.
The surge in Bitcoin’s value on Coinbase comes with an increased cost for their clients. This expense suggests that the market’s upward trend could be strengthening further, an exciting prospect for investors.
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2024-07-17 15:11