Markets
Bitcoin at $61,000 – All the reasons why the market is “cooling down”
- Bitcoin Price Around $61,000 Fallen Victim of Market Cooling, Summer Slowdowns
- Mt. Gox unlocking and government sales also raise supply concerns
The cryptocurrency market has not had the best of times lately. This was also the case at press time, with the sector’s total market capitalization falling to $2.26 trillion at press time. As expected, BitcoinThe world’s largest cryptocurrency, led the way, with BTC down nearly 1% on the charts.
Bitcoin and the market’s top altcoins weren’t the only ones affected, however.
The memecoin market, for example, also saw a slow-downwith a market capitalization down 1.33% to $47.89 billion. In fact, trading volume also fell significantly, by 19.31%.
Today, a variety of factors have contributed to this market-wide decline, both market-specific events and broader economic influences. It is therefore worth examining these factors.
Market Cools After Positive News on ETH ETF
Positive news regarding the potential trading of Ether ETF (ETH) has led to a cooling period in the cryptocurrency market. The U.S. Securities and Exchange Commission is reportedly close to approving ETFs tied to the spot price of Ether, with approval expected as early as July 4.
Although this anticipation initially motivated market optimism, subsequent market adjustments have contributed to the current downturn.
Additionally, seasonal trends and reduced trading activity during the summer months also affect the market. Historically, June has seen mixed performance for Bitcoin, with an average return of -0.56%. Simply put, it was one of the weakest months for the cryptocurrency.
The same thing happened recently Underlines by popular market analyst Dan Crypto Trades.
Source: X
It can therefore be argued that lower trading volumes during the summer holiday period lead to reduced market activity and greater volatility.
Concerns over Mt. Gox and government sell-off
The market is also facing concerns over the potential impact of Mount Gox unlocking and sales activities by government agencies. In fact, the same thing was highlighted by the latest QCP report weekend summary on the state of the crypto market.
Some now believe these supply concerns may be overblown. Still, the potential influx of bitcoin from these sources is creating uncertainty and contributing to bearish sentiment.
Support levels and future projections
Despite these bearish headlines, Bitcoin’s support level around $60,000 has shown resilience. If this support level weakens, we could see the cryptocurrency fall further. In doing so, BTC could eventually test lower levels around $50,000.
In fact, QCP analysts went on to say:
“We may test a decline to the 50,000 levels, but the market will find strong support there as interest in TradFi continues to permeate given the general regulatory easing across the globe.”
That being said, the planned launch of spot ETFs for other major cryptocurrencies like Solana (SOL) could spark renewed interest and provide some support to the market.
Given current market conditions, analysts recommend strategies to get through the crisis. For Bitcoin, it has been suggested that it generates yield in a sideways market, with the possibility of making directional bets in the fourth quarter.
For Ether, taking a short-term bullish position ahead of the ETF launch could be advantageous.