Markets
Is Bitcoin’s Crash Over? Experts Say We Need to Watch These 4 Drivers for Clues – DL News
- Bitcoin’s brutal week has come to an end.
- These four factors will indicate how long recovery will take.
Bitcoin fell to $54,300 on Monday morning, marking a drop of more than 15% since last week.
The drop dragged the global cryptocurrency market with it, with the total market valuation falling nearly 20% to 2.1 trillion dollarsaccording to CoinGecko.
“The streets are covered in hemoglobin,” said an analyst at cryptocurrency trading firm Wintermute, capturing the mood among investors.
But how bad will the bloodbath be?
Experts point out four factors that influence the price.
Ethereum ETFs
Industry experts anticipate that US regulators will approve spot Ethereum exchange-traded funds as earlier this week.
The market’s reaction to any positive ETF update will serve “as a barometer of market sentiment as people lick their wounds and start to shake off last week’s move,” said David Zimmerman, an analyst at K33 Research. DL News.
“It would be a great sign” if the launch sent Bitcoin back up to levels around $60,000, Zimmerman said.
Join the community to receive our latest stories and updates
Given the close correlation between Bitcoin and Ethereum, an Ethereum spot ETF would also be bullish for Bitcoin.
If Bitcoin’s price rises, Zimmerman says it would indicate that despite the latest bear market, investors still have an appetite for assets like Bitcoin.
Analysts Estimate Ethereum Spot ETFs Will See Inflows of 500 million dollars within a week of its launch and $15 billion in net inflows in the first 18 months.
Since their launch six months ago, Bitcoin ETFs have seen a record $14 billion in inflows.
Mt. Gox Refunds
The wait for Mt. Gox users to get their money back is coming to an end.
Creditors have waited a decade to receive up to $9 billion owed in cryptocurrencies following the catastrophic stock market crash in 2014.
On Friday, the entity responsible for payments began returning $2.6 billion in Bitcoin to creditors.
Many expect creditors to sell their assets as soon as they reach their pockets.
“This will weigh on the market once repatriation resumes in earnest or the market starts paying more attention,” Brian Rudick, senior strategist at crypto trading firm GSR, said recently. DL News.
Others suggest that the damage caused by Mt. Gox refunds to cryptocurrency prices has already passed.
“These distributions are now close to or fully priced in,” the Wintermute analyst said.
Germany
The German government has moved more than 10,000 Bitcoins, or nearly $1 billion, to different wallets and exchanges since June 19, according to Arkham Intelligence.
This helped trigger last week’s cryptocurrency slump, as investors interpreted the government’s move as a sign that it plans to sell large amounts of its billions in Bitcoin.
“The German government can slow down now,” Zimmerman said.
Federal Reserve
Traders are also monitoring signs that the Federal Reserve is comfortable with its fight against inflation.
A cut in interest rates means investors are more likely to buy riskier assets like cryptocurrencies.
US jobs data for May showed a rise in unemployment, cementing the view of some experts that job cuts are coming soon.
“September looks right for the Fed to start the rate-cutting cycle,” with the market expecting two cuts by 2024, wrote David Brickell, head of international distribution at FRNT Financial, and former FX trader Chris Mill, in their latest “Connecting the dots” News Bulletin.
Eric Johansson is the news editor at DL News. Got a tip? Send an email to eric@dlnews.com.