In-Depth Bitcoin Price Drop Analysis

Specifically, on July 3, 2024, the price of Bitcoin declined by 4.2% within 24 hours, reaching its intraday low at $59,600. This was a continuation of a decline that started in the first week of June. It is evident that by the second quarter of 2024 Bitcoin was down by a little over 18%. This significant drop challenges the market for a breakout above $70000 which most believed would create new records. However, breaking the $60,000 support level indicates an extensive period within which bulls will struggle to defend the crypto asset.

Bitcoin one day Chart by CMC

One of the main reasons for this change in the recent period is the expected repayment of bitcoin to the creditors of the now-defunct Mt. Gox exchange. The largest exchange by volume, Mt. Gox, was closed in 2014 after being hacked. The process of repaying these debts is expected to start in early July 2024, where around 127,000 creditors will receive more than 9 billion US dollars’ worth of Bitcoin. Many of these creditors have been waiting for the debt to be repaid for more than 10 years, and they may decide to sell their long-term profits.

Charles Edwards of Capriole Investments noted a sharp rise in BTC volumes which pointed to the huge volumes of Bitcoin in circulation shifting on-chain. Ambiguously, Edwards speculated that this movement could be possibly connected to the Mt. Gox repayments as the latter may have begun. Such a move could exert downward pressure on prices depending on the decisions of the recipients of the BTC.

Another factor which precipitated the drop in the price of Bitcoin is the price manipulators commonly referred to as the whale. One of the most notable examples include an incident where an unidentified whale boastingly caught their attention by purchasing $180 million worth of Bitcoins in only three minutes. This is because a large sale of shares at the prevailing market prices can trigger a lot of selling pressure, and thus, depress prices. Moreover, another whale performed 1,723 BTC ($168mln+) transaction which went to Binance, the leading cryptocurrency exchange platform in the world. This transfer signals a bearish sentiment, which is the basis for the expectation of an increased supply that would continue to pull down the price of Bitcoin.

Credit :Dune

Though all these theories can be argued from a technical point of view, the fundamental trend remains healthy, with encouraging signs of institutional support and increasing use of cryptocurrencies. The fundamentals of Bitcoin, such as the design of the digital asset with a limited number of units and with more uses as the world evolves are long-term fundamentals that still support the asset.
The decline in the price of Bitcoin below $60,000 can be attributed to a combination of factors that include the expected Mt Gox repayments, and bout of selling by the Bitcoin whales. Even if these occurrences have exerted short-term pressures in a sell-off manner, the long-term support from institutional buying by investors via Bitcoin ETFs is worth considering as a balancing force. Amidst these prospects, it is crucial to note that the very long-term basic properties of Bitcoin shall remain favorable, and with continued advances.

Disclaimer!! The information provided by CryptopianNews is for educational and informational purposes only. It should not be considered financial or investment advice. Cryptocurrency markets are highly volatile and speculative, and investing in them carries inherent risks. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions.

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