The reason behind Bitcoins current crash
Bitcoin (BTC) has been struggling recently, despite reaching its new all-time high (ATH) this year. The cryptocurrency has experienced occasional dips below the critical price level of $60,000, dragging the rest of the market down with it, leaving traders puzzled about the reasons behind it.
Bitcoin has been trending bearishly for weeks, dropping well below its recent record-breaking price of $73,738, failing to meet expectations despite positive developments such as the approval of spot Bitcoin exchange-traded funds (ETFs) and the halving event.
At present, Bitcoin is changing hands at $60,530, indicating a 3.35% decline in the last 24 hours, a 2.30% weekly loss, and a 13.10% monthly dip, according to the most recent data on July 3.
Several factors seem to be potentially related to Bitcoin’s recent lack of success and unfavorable price performance, including the current macroeconomic atmosphere, lack of liquidity, miner capitulation, and the possible start of Mt. Gox creditor repayments.
One of the factors contributing to Bitcoin’s struggles is the expectation of a dump of Bitcoin worth around $9 billion as the defunct crypto exchange Mt. Gox announced plans to begin repayments in July 2024. This marks the end of a decade-long ordeal for creditors since the company shuttered its operation following a hacking incident.
In addition, Bitcoin miners have been showing signs of capitulation, selling reserves equivalent to five mining days in a three-day period. Market optimism has also been declining, with no imminent interest rate cuts signaled by Jerome Powell, the chairman of the United States Federal Reserve. Liquidity is concentrated below $60,000, with traders noting order ‘spoofing’ on crypto exchanges.
Despite the current pessimistic price action, July has traditionally been a bullish month for Bitcoin, following a bearish June. Analysts are confident that Bitcoin will recover and continue to increase in price toward $100,000 after this temporary setback. Many experts believe in its long-term success, but investing in crypto assets is risky, so doing one’s own research is necessary.