Markets
Will Bitcoin Price Drop Below $50,000?
After maintaining a price above $60,000 for a significant period, Bitcoin Bitcoin price recently fell below $58,000, down more than 3.8% in the last 24 hours. This drop has caught the attention of many analysts and investors. Here’s a look at where things stand now and what could happen next for Bitcoin.
Current Bitcoin Price Dynamics
Bitcoin price fell below $58,000 on Thursday morning, hitting a two-month low. The drop comes amid unusually low volatility, with BTC prices previously hovering between $60,000 and $70,000. With fear and supply growing in the cryptocurrency market, bearish expectations are on the rise. At the 200D EMA, the chances of a breakout are significantly higher than a reversal, as trading volume is up 55% in 24 hours.
Despite this recent price drop, Glassnode analysis suggests that periods of low volatility are often followed by large price swings.
Key factors behind the recent price decline
Wise Advice, a crypto analyst, has shed light on the possible reasons for the BTC free fall.
Mt. Gox Token Distribution
A major contributing factor to The price of Bitcoin The drop is due to the upcoming distribution of nearly $9 billion worth of BTC by the former Mt. Gox exchange. With around 140,000 Bitcoins set to be distributed to creditors in July, there are concerns that creditors will 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 sell Bitcoin
Another problem is that Bitcoin miners have started selling their BTC holdings. Since Monday, they have sold over $150 million worth of Bitcoin on exchanges. This selling pressure comes as miners’ daily revenue has dropped from $79 million to $29 million due to the Bitcoin halving event. To maintain their operations, miners are forced to liquidate their assets.
Increase in liquidations
Over the past 24 hours, approximately $231.9 million worth of long positions have been liquidated. This has further exacerbated the Bitcoin price drop and created a feedback loop of falling prices and increasing liquidations.
A buying opportunity on the downside?
With supply increasing, long liquidations are on the rise. Will the bearish trend lead to a drop below the $56,000 level to test the psychological $50,000 mark? On-chain data provider Santiment has observed Bitcoin and altcoins have been selling off massively, with prices hitting their lowest levels in nearly two months. Despite the planned arrival of Ethereum spot ETFs by July 15, Ethereum prices have also fallen below $3,200.
Santiment suggests that current market conditions could present a dip buying opportunity. He recommends waiting until the initial market enthusiasm fades and traders become skeptical and impatient before making new investments.
Read also: Top 5 Reasons Why The Cryptocurrency Market Is In A Crisis Today
Will BTC reach $50,000 or stay at $56,000 with the current rate of decline? Let us know what you think.