- Bitcoin recently dropped to its lowest point since February 2024, trading at $55,585 amid market fears of increased selling pressure from upcoming Mt. Gox repayments and political uncertainties.
- Analysts predict further declines, potentially reaching $50,000, unless significant market recovery triggers occur.
Bitcoin’s recent performance has left investors anxious, with the cryptocurrency plunging to $53,600 on Coinbase on July 5, 2024. This marks its lowest point since February 2024. Despite a slight recovery, Bitcoin is currently trading at $55,585, having declined 3.8% in the past 24 hours. Analysts fear that the worst may not be over yet, citing multiple factors contributing to this bearish trend.
Key Factors Behind Bitcoin’s Decline
Several market analysts, including Josh Gilbert from eToro, attribute Bitcoin’s ongoing sell-off to the anticipated Mt. Gox repayments. The release of over $8 billion worth of Bitcoin into the market is expected to create significant selling pressure. Additionally, political uncertainty due to the upcoming elections is also believed to be influencing market prices.
The imminent release of the US jobs data further adds to the market’s volatility. With a forecast of 200,000 jobs in June and an unemployment rate of 4%, this data is crucial for the US Federal Reserve’s decisions regarding rate cuts for 2024. Gilbert notes that these macroeconomic factors heavily influence asset prices in the crypto market.
10X Research also predicts a further decline in Bitcoin’s price, anticipating it to fall within the $55,000-$50,000 range. They advise investors to wait for a recovery rather than attempting to catch a falling knife, warning that breaking below key support levels could intensify selling pressure.
Analyst Ali Charts shares a similar outlook, suggesting that the market has already reached its peak excitement and is now in a cooling phase. According to Charts, this retracement phase is a necessary pause before the next rally.
Potential Catalysts for Recovery
Despite the prevailing bearish sentiment, there are potential catalysts for a market recovery. Gilbert points out that a rate cut from the Federal Reserve could trigger a positive shift in the market. Additionally, the approval of Ether ETFs and significant buy-the-dip actions from investors might pave the way for a recovery phase.
Technical Analysis and Price Predictions
Bitcoin’s recent price action has shown significant volatility. Between June 29 and July 1, BTC displayed positive movement but has since experienced four consecutive days of declines. It has dropped below the $57,500 resistance level and is nearing the critical support level of $53,600. Failure to hold this support could see Bitcoin plummet to $50,000 in the coming days.
Technically, Bitcoin is trading close to the lower band of the Donchian Channel, indicating intense selling pressure. The Relative Strength Index (RSI) is in the oversold region with a value of 25.84, suggesting further declines are likely.
Bitcoin’s short-term outlook remains bearish, with analysts predicting it will trade within the $53,600-$50,000 range until buyers regain momentum. Investors are advised to stay cautious and monitor the market closely for any signs of a potential recovery.
