Bitcoin experienced a significant drop to $53,600 on Coinbase on July 5, its lowest point since February 2024, before a minor recovery. Currently trading at $55,585, the cryptocurrency has fallen by 3.8% in the past 24 hours.
Analysts attribute this decline to fears of increased selling pressure from the impending Mt. Gox repayment, which is expected to introduce over $8 billion worth of Bitcoin into the market, potentially driving prices down further.
Market analyst Josh Gilbert from eToro has identified multiple factors contributing to the current sell-off. He highlights the Mt. Gox repayment as a major source of fear, anticipating that the influx of Bitcoin could exacerbate selling pressure. Additionally, political uncertainty surrounding upcoming elections is also influencing the market.
Gilbert points to the imminent release of US jobs data, which is expected to show 200,000 new jobs and a 4% unemployment rate. This data will play a crucial role in the Federal Reserve’s decision-making regarding rate cuts for 2024.
Gilbert anticipates that these macroeconomic factors will continue to impact asset prices in the crypto market, predicting that Bitcoin could fall to a critical support level of $50,000 within the next week. Digital asset firm 10X Research echoes this sentiment, forecasting a decline to the $55,000-$50,000 range and advising investors to wait for a recovery rather than attempting to catch a falling knife.
Bitcoin Faces Selling Pressure Amid Mt. Gox Repayment Concerns: Drops to $53,600 Before Minor Recovery
The firm warns that breaking below key support levels could intensify selling pressure as traders seek liquidity.
Analyst Ali Charts believes that the market has reached its peak excitement and is now entering a cooling-off phase. This retracement is seen as inevitable before the next rally.
Recent market events, including the approval of Bitcoin ETFs and the surge in meme coins and celebrity altcoins, may have already brought the market to a euphoric peak. Ali suggests that the current complacency indicates a need for a period of cooling off before another upward movement.
Despite the bearish outlook, there is potential for a market recovery if certain conditions are met. Gilbert notes that a Federal Reserve rate cut could serve as a catalyst for a rebound. Additionally, the approval of an Ether ETF and strong buy-the-dip actions from investors might initiate a recovery phase.
In the meantime, Bitcoin’s price volatility is expected to continue, with the cryptocurrency likely trading in the $53,600-$50,000 range until buyers regain momentum. Technical indicators, such as the Donchian Channel and RSI, confirm the ongoing selling pressure and suggest further price declines in the near term.
