Crypto Market Crash: Will Bitcoin Price Drop Below $50K?

Crypto Market Crash: Will Bitcoin Price Drop Below $50K?

The post Crypto Market Crash: Will Bitcoin Price Drop Below $50K? appeared first on Coinpedia Fintech News

After maintaining a price above $60,000 for a significant period, Bitcoin recently fell below $58,000, marking a drop of over 3.8% in the past 24 hours. This decline has caught the attention of many analysts and investors. Here’s a breakdown of the current situation and what might lie ahead for Bitcoin.

Current Bitcoin Price Dynamics

Bitcoin’s price dipped below $58,000 early on Thursday, reaching a two-month low. This drop comes amidst an unusually low volatility phase, with BTC prices previously fluctuating between $60,000 and $70,000. With increasing fear and supply in the crypto market, bearish anticipations are on the rise. Standing at the 200D EMA, the breakdown chances are significantly higher than that of a reversal as the trading volume surges 55% in 24 hours.

Despite this recent price dip, Glassnode’s analysis suggests that periods of low volatility are often followed by significant price changes.

Key Factors Behind the Recent Price Drop

Wise Advice, a crypto analyst, has shed light on the possible reasons behind the BTC freefall. 

Mt. Gox Token Distribution

One major factor contributing to Bitcoin’s price drop is the upcoming distribution of nearly $9 billion worth of BTC by the defunct Mt. Gox exchange. With around 140,000 Bitcoins set to be distributed to creditors in July, there is a fear that these creditors might sell off a substantial portion of their BTC holdings. Given that the price of Bitcoin was approximately $600 when Mt. Gox collapsed, these creditors stood to make substantial profits, which could pressure the BTC market.

Miners Selling Off Bitcoin

Another issue is that Bitcoin miners have started to sell their BTC holdings. Since Monday, they have offloaded over $150 million worth of Bitcoin on exchanges. This selling pressure comes as daily miner revenue has decreased from $79 million to $29 million due to the Bitcoin halving event. To maintain their operations, miners are forced to liquidate their assets.

Increased Liquidations

The past 24 hours saw approximately $231.9 million worth of long positions being liquidated. This has further exacerbated the Bitcoin price drop and created a feedback loop of declining prices and increased liquidations.

Buy-the-Dip Opportunity?

With the increasing supply, the long-liquidations are on the rise. Will the bearish trend result in a drop below the $56,000 level to test the psychological mark of $50,000? On-chain data provider Santiment has observed heavy sell-offs in both Bitcoin and altcoins, with prices hitting nearly two-month lows. Despite the anticipated arrival of spot Ethereum ETFs by July 15, Ethereum prices have also dipped below $3,200.

Santiment suggests that the current market conditions may pose a buy-the-dip opportunity. They recommend waiting for initial market enthusiasm to fade and for traders to become skeptical and impatient before making new investments.

Will BTC reach $50K or stay at $56K with the current decreasing rate? Tell us your views.