Title: Crypto Market Experiences Another Major Drop, BTC Falls Below $53,500
Author: Climber
Date: July 5th
The cryptocurrency market has once again experienced a significant drop, with BTC briefly falling below $53,500. As of the time of writing, BTC has risen to $58,000. However, whether this is the best time to buy in is only known by the market insiders.
Whenever the cryptocurrency market undergoes a deep correction, there is always a divergence of opinions between the bulls and bears, with various noises affecting investment decisions. But the key difference this time compared to previous major drops is the divergence between Bitcoin and altcoins.
Last October, during the beginning of the bull market, BTC fluctuated around $25,000 and then reached a peak of $73,777. Currently, BTC has experienced a decline of approximately 27.5%, but most altcoins have erased their gains and fallen back to their starting point of this market cycle. Mechanism Capital’s co-founder even stated that over 98% of altcoins have already reached their peak in this cycle. In short, altcoins are finding it difficult to sustain further declines, but the bulls and bears in the crypto market still hold different views, each with their own justifications.
Bullish Views and Potential Positive Factors:
Matrixport: It is expected that the US SEC may approve a spot Ethereum ETF this week, which could cause a rebound in ETH prices. Due to the holiday on July 4th, the SEC may postpone the decision until the week of July 8th. If the SEC takes action this week, ETH prices could rebound.
Block founder Jack Dorsey: BTC could replace the US dollar, and it is predicted that BTC will reach $1 million. Over time, people will gradually recognize the value and power of BTC, and it has the potential to replace the US dollar. This will take some time, but people will gradually realize the value of this system.
Blockstream CEO: In the history of bull markets, there have been six instances of a 30% decline, and it is advised to buy on dips. Because the current decline is only about 26%, in fact, the recent decline has not been significant.
Fundstrat Global Advisors research director: It is predicted that BTC will rise to $150,000 after the completion of the Mt. Gox distribution. One of the biggest negative factors will disappear in July, and I believe this is one of the reasons for the expected significant rebound in the second half of the year.
10x Research: Bitcoin appears to be oversold in the short term, and a rebound may occur. The target of $55,000 for Bitcoin’s decline has been reached, and positive macroeconomic news is expected next week. In addition, the SEC may approve an Ethereum ETF, which could trigger positive momentum in the short term. However, it is not considered an important buying opportunity in the medium term.
GSR co-founder: Bitcoin still has enough time to reach new highs before the end of the year. The amount to be paid (by Mt. Gox) will become a “burden for the third quarter of the market”, “almost as much as the number of bitcoins mined in the first year after the halving.” However, once this burden is digested, there is still enough time for Bitcoin to reach new historical highs before the end of the year.
Analyst: Bitcoin’s daily RSI indicator shows a clear bullish divergence signal. Encouraging signals have been observed in Bitcoin’s daily relative strength index (RSI), including a bullish divergence.
CryptoQuant founder: This Bitcoin cycle is different, and there is still a lot of institutional capital waiting to enter. This cycle is unique, with different sources of funds. Currently, spot Bitcoin ETFs account for one-fourth of the total spot trading volume, which means that new entrants’ funds are more mature than ever before. It is believed that more mature funds will enter the market in the future, as mature funds usually have diamond hands. The channels are now open for them.
CryptoQuant analyst: Bitcoin miner capitulation indicator is close to the bottom after FTX crash, indicating a market bottom. Specifically, the Bitcoin miner capitulation indicator is close to the market bottom level after the FTX crash in 2022, which may indicate that the BTC market has reached its bottom. Miner capitulation refers to some miners reducing operations or selling the BTC they mined to sustain their livelihood or hedge risks.
This is similar to the situation when BTC hit a bottom of $15,500 at the end of 2022, and then rose over 300% in the following 15 months.
Rekt Capital: The longer the consolidation period after Bitcoin halving, the better the resynchronization with traditional halving cycles.
Positive Factors:
CryptoQuan: Selling pressure from Bitcoin miners is weakening, and if absorbed, it could lead to a bullish trend.
Crypto analyst Ash Crypto: Repayment by FTX to creditors will be the biggest catalyst for the rise in cryptocurrency prices.
Concerns about the Mt. Gox crash and other negative factors aside, some factors will drive the cryptocurrency market to new highs. For example, FTX plans to distribute over $16 billion to its creditors. The voting deadline for FTX customers is August 16th, and Judge Dorsay’s decision is scheduled for October 7th. If approved by the court, FTX will repay its creditors within two months. This aligns perfectly with other positive factors, such as interest rate cuts, implementation of accounting rules by the Financial Accounting Standards Board, and the outcome of the US election. The massive influx of $16 billion in funds will enter the cryptocurrency market and become the biggest catalyst for price increases.
Financial Times: Former President Trump’s possible return to the White House could lead to a significant surge in Bitcoin’s value. Due to his “perceived support for cryptocurrency and his policies,” the concept of “Trump trading” is gaining popularity among cryptocurrency traders. Analysts believe that Trump’s victory could lead to a significant increase in Bitcoin and potentially reach another historical high in August, reaching $100,000 on election day.
Other positive factors include: the multiple purchases of BTC by Japanese listed company Metaplanet, a cumulative net inflow of $238.4 million into the US spot Bitcoin ETF in the first week of July, the possibility of Dell’s founder buying a large amount of Bitcoin, and Sony’s plan to relaunch the acquired cryptocurrency exchange Whalefin.
Bearish Views and Potential Negative Factors:
Gold advocate Peter Schiff: The BTC bear market still has a long way to go, and ETH may fall to $1,500. It is currently “at a critical support level,” and if the support level is not stable, prices may drop significantly.
There are no signs of panic so far. Bitcoin may need to experience a significant drop before the bulls finally surrender. This could happen as early as next week, especially after another large-scale sell-off this weekend.
Andrew Kang: Over 98% of altcoins have already reached their peak in this cycle, and it is a common investment mistake to buy in too early. The most common mistake in the crypto market is buying in too early when the trend changes from upward to downward. Adjustments after a major market structure collapse often turn out to be deeper and longer than expected. Bitcoin is currently in a transitional phase towards a super-cycle asset, combining characteristics of previous cycles and mature macro assets. eToro analyst: Bitcoin’s future trend will further deteriorate in the coming days, and a catalyst event is needed for a market reversal. The current selling activity is clearly making investors uneasy, which often triggers more selling. Prices will remain weak in the short term until a catalyst event that drives prices upward occurs.
Analyst Axel Adler Jr: Bitcoin’s unrealized profit indicator on-chain may trigger further selling. Ordinary investors have already realized 84% of their unrealized profits from their Bitcoin investments. The price is close to the average of $52,200 (PR Bands) – this could reduce unrealized profits by about 14%, and investors may choose to take profits due to concerns about further price declines.
Material Indicators: Bitcoin faces technical resistance from the 200-day moving average, and if Bitcoin fails to break through, be prepared for the market to test support levels in the range of $50,000 to $53,000.
Ali charts data: Capital continues to exit the cryptocurrency market, dropping from over $110 billion in March to $20 billion today.
Negative Events:
Binance: Bitcoin miners are experiencing the longest continuous net selling period since 2017.
Lookonchain: The German government has transferred a total of 13,466 BTC since June 19th and still holds 39,826 BTC (as of July 7th).
The ongoing Mt. Gox compensation, undecided FTX judgment date, regulatory uncertainties, large token unlocks in cryptocurrency projects, etc.
Conclusion:
In terms of the current market sentiment in the cryptocurrency market, bullish views still dominate. The main reasons behind this are the release of negative factors such as government regulations, ETFs, miner selling, and Mt. Gox compensation, as well as many positive expectations for the second half of the year, such as interest rate cuts, elections, FTX debt repayment, and the approval of an Ethereum ETF. The cryptocurrency bull market cycle theory also makes many investors optimistic about future market trends.
However, investors still need to be aware that the cryptocurrency market carries significant risks and is highly susceptible to negative factors. It is crucial to always protect one’s capital.
Tags:
Ethereum
Crypto market
Cryptocurrency
Bitcoin
Miners
Jinse.com
