Markets
Bitcoin Falls Below $59,000 on Market Uncertainty
Bitcoin (BTC) The stock fell below $59,000 on Thursday, trading at $58,827.
Market data shows Bitcoin has fallen 3.38% over the past day, hitting its lowest point since early May despite expectations of a price recovery. Rachael Lucas, crypto analyst at BTC Markets in Australia told The Block:
The drop below the $60,000 resistance line is significant because it marks a psychological barrier for many investors. […] If bitcoin stays below this level, we could see increased volatility in the short term.
The recent price fluctuations are largely attributed to the upcoming payment to Mt. Gox creditors, who are set to receive around 142,000 BTC (worth around $9 billion) starting in July. This follows Mt. Gox Transfer $840 Million in Bitcoin In late May, Lucas suggested that the substantial refund could put “significant selling pressure” on the market.
Adding to the uncertainty are concerns about inflation and interest rates in the United States. Federal Reserve Chairman Jerome Powell recently said Despite the progress, policymakers said more work was needed to control inflation. Contrary to investors’ hopes for multiple cuts, the Fed’s indication that it would consider only one potential interest rate cut this year helped fuel risk-off sentiment in markets.
Analysts undecided on Bitcoin direction
While some analysts had predicts Bitcoin rebound in JulyCiting historical trends, Bit.com CMO Toya Zhang expressed skepticism. Zhang cited low market liquidity and a lack of new narratives about cryptocurrencies as obstacles to meaningful growth without lower interest rates.
Zhang also noted an increase in large sell orders in over-the-counter markets, suggesting that high-net-worth individuals and family offices are taking advantage of the previous bull cycle. Recent data shows a decline in trading volumes for spot Bitcoin in the United States exchange traded funds (ETFs)with volume falling to around $800 million on Wednesday.
Lucas concluded by predicting continued volatility in Bitcoin in the coming week as the market processes the Mt. Gox repayments and reacts to broader economic indicators. She added that a rebound could occur if market liquidity remains strong, as has happened after previous selloffs.