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Bitcoin Traders Anticipate Price Drop to $50,000 Amid Selling Pressure
Bitcoin traders are closely monitoring the market as selling pressure mounts, with many anticipating a potential price drop to $50,000.
Bitcoin (BTC) traders are bracing for a potential drop in prices to as low as $50,000, a level not witnessed since mid-February. The largest cryptocurrency by market cap has experienced a decline of over 10% in the last week, according to data from CoinGecko, slipping below a critical technical indicator on Thursday and wiping out all gains achieved since the end of February.
Market Sentiment and Analysis
Trading firms like QCP Capital have linked the prevailing bearish sentiment to wallet activity related to a German government entity and the defunct crypto exchange Mt. Gox. Analysts suggest that significant selling pressure could continue in the near future.
Rachel Lin, founder of on-chain crypto exchange SynFutures, highlighted the potential selling pressure from entities like the German government holding over $2.3 billion in Bitcoin, Mt. Gox with more than $8 billion, and the US government with over $12 billion. Lin noted that if selling intensifies, pushing prices lower, BTC could reach the $50,000 level soon.
Alex Kuptsikevich, a senior market analyst at FxPro, remarked that Bitcoin’s failure to bounce back above the 200-day moving average indicates a bearish trend. He suggested a possible further drop to $51,000, considering established patterns and market dynamics.
Recent Developments
- Mt. Gox initiated the distribution of Bitcoin and Bitcoin Cash stolen in a 2014 hack, causing an 8% drop in BTC prices as traders reacted to the news.
- A wallet associated with the German Federal Criminal Police Office (BKA) has been moving significant amounts of Bitcoin to exchanges since mid-June, signaling a potential sell-off of assets seized in 2013 from a piracy marketplace.
Despite the downward pressure, Bitcoin prices showed a brief recovery during the European trading session, climbing back to nearly $55,000 from an early Asian hours low of $53,600. The sudden drop led to the liquidation of over $550 million in crypto long positions in the past 24 hours.