Photo by Bitcoin’s Price Plunge: What’s Behind the Sudden Drop?
The cryptocurrency market has been experiencing a significant downturn, with Bitcoin’s price plummeting to levels not seen since mid-February. The largest cryptocurrency by market cap has lost over 10% of its value in just seven days, with many traders and analysts predicting further declines.
Bitcoin’s price has been on a downward trend
One of the main factors contributing to this bearish sentiment is the looming selling pressure from various government entities and defunct crypto exchanges. The German government, for instance, still holds over $2.3 billion worth of Bitcoin, while Mt. Gox has more than $8 billion. The US government also has a significant stash of over $12 billion.
“The market expects most Mt. Gox users to dump their tokens, but we might see a bounce back if the selling is lower than anticipated. On the other hand, if there is enough selling to push the price lower, we might be looking at the $50,000 level soon,” said Rachel Lin, founder at on-chain crypto exchange SynFutures.
Mt. Gox’s distribution of stolen Bitcoin and Bitcoin Cash has added to the selling pressure
The recent distribution of Bitcoin and Bitcoin Cash by Mt. Gox has also added to the selling pressure, with traders reacting negatively to the news. Additionally, a wallet connected to the German Federal Criminal Police Office (BKA) has been moving millions of dollars worth of Bitcoin to crypto exchanges since mid-June, implying an intention to sell the assets forfeited in 2013 from a piracy marketplace.
The German Federal Criminal Police Office’s wallet activity has raised concerns
As the market continues to digest this news, many analysts are predicting further declines in Bitcoin’s price. Alex Kuptsikevich, a FxPro senior market analyst, believes that a drop to $51,000 is more likely than a rebound to $65,000.
Bitcoin’s price is struggling to stay above the 200-day moving average
With the selling pressure mounting and the technical indicators pointing to further declines, it’s clear that Bitcoin’s price is in for a wild ride. Will it bounce back or continue to plummet? Only time will tell.
The cryptocurrency market is bracing for impact
