Even with this decline, the rapid rise of Bitcoin has still made it one of the greatest investments in all history.
Bitcoin has recently dipped toward the $50,000 mark, following a warning from Federal Reserve Chair Jerome Powell about a potentially critical phase for the economy. Over the past month, Bitcoin has shed about 25% of its value. The collective market cap of major cryptocurrencies including Bitcoin, Ethereum, XRP, and Solana is nearing a $2 trillion threshold, a steep fall from almost $3 trillion recorded in March.
Is Bitcoin going to hit $50,000 ❓😱
#BTC just dropped below $58k and hit a 2-month low.Here are a few reasons behind the #BTC price drop:
1⃣ Mt. Gox Token Distribution
🔻 Mt. Gox is going to distribute $9 billion worth of BTC in July, and the fear is that creditors could… pic.twitter.com/LENc4e4GQh
— Wise Advice (@wiseadvicesumit) July 4, 2024
With these market fluctuations, a notable tech entrepreneur suggested that Bitcoin might one day replace the U.S. dollar. Meanwhile, developments at the defunct Bitcoin exchange Mt. Gox have stirred the market. On July 5, 2024, Mt. Gox’s rehabilitation trustee reportedly began distributing Bitcoin and Bitcoin Cash to certain creditors, as detailed in a letter from the exchange. This update briefly appeared on the Mt. Gox website before becoming inaccessible, with no immediate explanation provided.
Crypto analysts from Arkham Intelligence observed a significant move of about 50,000 bitcoins, valued at approximately $2.7 billion, from Mt. Gox to another wallet. This activity hints that these assets might soon be allocated to creditors. Neil Roarty, an analyst at Stocklytics, suggested that if an additional 200,000 bitcoins, worth over $10 billion, were to flood the market shortly, the resulting oversupply could further depress Bitcoin’s price.
By the end of June, Mt. Gox trustees had announced plans to distribute nearly $10 billion in Bitcoin, Bitcoin Cash, and fiat currency to creditors starting early July.
🚨 Bitcoin crashes to $57K! Over 105,000 traders face huge losses as the crypto market plunges. Hundreds of millions wiped out in a day. 📉 #CryptoCrash #Bitcoin #CryptoMarket pic.twitter.com/zMQFZ6TQvU
— Epic Techie (@EpicTechie8) July 5, 2024
The overall cryptocurrency market appeared to stabilize somewhat after a sharp sell-off, though fears persist that the downward trend could continue, affecting Ethereum, XRP, Solana, and other cryptocurrencies. The Crypto Fear & Greed Index, according to Alternative.me, has dropped to its lowest point since January 2023, reflecting widespread anxiety within the market.
According to Alex Kuptsikevich from FxPro, the market cap for cryptocurrencies dipped below $2 trillion again, accelerating its decline by over 8% in a day, with several altcoins experiencing double-digit losses. The breakdown in Bitcoin’s 200-day moving average has not provided the expected support, leading to a rapid sell-off.
Rachel Lin, CEO of SynFutures, noted that Bitcoin’s trajectory in the near future would likely be influenced by whether Mt. Gox users sell off their newly acquired tokens. If selling exceeds expectations, Bitcoin might test the $50,000 level again. However, there could be a rebound if the selling pressure is less intense than anticipated.
Lin highlighted that crucial levels for Bitcoin and Ethereum, previously at $60,000 and $3,350 respectively, have been decisively breached. This breach has had a cascading effect on the broader market, with Ethereum dropping nearly 9% over the past week and many meme coins losing 10% to 20% of their value.
Major Points
- Bitcoin’s value has dropped to around $50,000 following a warning from Federal Reserve Chair Jerome Powell about economic risks.
- The overall cryptocurrency market cap has nearly reached $2 trillion, a significant decrease from $3 trillion in March.
- Mt. Gox, a bankrupt bitcoin exchange, has started distributing bitcoins to some creditors, affecting market dynamics.
- Significant bitcoin movements from Mt. Gox have raised concerns about potential market oversupply and further price drops.
- Market sentiment is low, as indicated by the Crypto Fear & Greed Index, amidst fears that selling pressures could drive prices even lower.
Al Santana – Reprinted with permission of Whatfinger News
