Markets
Will Bitcoin Price Drop Below $50K?
After maintaining a price above $60,000 for a significant period, Bitcoin 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 could be next for Bitcoin.
Current Bitcoin Price Dynamics
Bitcoin’s price fell below $58,000 early Thursday, hitting a two-month low. This drop comes amid a phase of unusually low volatility, with BTC prices previously fluctuating between $60,000 and $70,000. With fear and supply rising in the crypto market, bearish expectations are rising. Standing at the 200D EMA, the chances of a breakout are significantly higher than those of a reversal, as trading volume surges 55% in 24 hours.
Despite this recent price drop, Glassnode’s analysis suggests that periods of low volatility are often followed by significant price changes.
Main factors behind the recent price drop
Wise Advice, a cryptocurrency analyst, has cabin light on the possible reasons behind BTC’s freefall.
Mt. Gox Token Distribution
An important contributing factor to Bitcoin Price The drop is the upcoming distribution of nearly $9 billion worth of BTC by the now-defunct exchange Mt. Gox. With around 140,000 Bitcoins scheduled to be distributed to creditors in July, there is a fear that these creditors may sell a substantial portion of their BTC holdings. Given that the price of Bitcoin was around $600 when Mt. Gox collapsed, these creditors were poised to make substantial profits, which could put pressure on the BTC market.
Miners selling Bitcoin
Another issue is that Bitcoin miners have started selling their BTC holdings. Since Monday, they have unloaded over $150 million worth of Bitcoin on exchanges. This selling pressure is happening because miners’ daily revenue has dropped from $79 million to $29 million due to the Bitcoin halving event. Miners are forced to liquidate their holdings in order to maintain their operations.
Increase in liquidations
In the past 24 hours, approximately $231.9 million worth of long positions were liquidated. This further exacerbated Bitcoin’s price decline and created a feedback loop of declining prices and increased liquidations.
Opportunity to buy low?
With supply increasing, long liquidations are increasing. Will the bearish trend result in a drop below the $56,000 level to test the psychological $50,000 mark? On-chain data provider Santiment has observed heavy liquidations in both Bitcoin and altcoins, with prices hitting nearly two-month lows. Despite the early arrival of Ethereum spot ETFs by July 15, Ethereum prices also fell below $3,200.
Santiment suggests that current market conditions may present an opportunity to buy the dip. They recommend waiting for the initial market enthusiasm to fade and traders to become skeptical and impatient before making new investments.
Read too: Top 5 Reasons Why Cryptocurrency Market Is Bleeding Today
Will BTC hit $50K or remain at $56K with the current decreasing rate? Tell us your views.