After weeks of tense trading, July 4 marked a critical moment for the cryptocurrency markets as Bitcoin (BTC) and several other major coins and tokens experienced significant declines. The total market capitalization of cryptocurrencies plummeted by over $130 billion in a single day, dropping from approximately $2.18 trillion to $2.05 trillion.
Bitcoin faced the risk of a sharp decline as it struggled to maintain a crucial support level around $57,000. However, the overall market downturn was not solely attributed to Bitcoin, as the combined market cap of other cryptocurrencies also fell by approximately $60 billion within 24 hours.
The bearish sentiment that intensified on July 4 had been building up over preceding weeks. Analysts speculated that the frenzy around meme coins, which had seen many such cryptocurrencies trading near record highs, might be nearing its conclusion. Additionally, major cryptocurrencies had been exhibiting sideways trading patterns for months.
Despite expectations for Bitcoin to reach new highs following the April halving event, it remained stuck in a range close to $67,000 and failed repeatedly to surpass the peak of $73,000 achieved in March. Pressure continued to mount in the market.
Solana (SOL) faced controversy when its stablecoin volume unexpectedly dropped by 90% in a single day, coinciding with rumors of a potentially significant legal case against the platform. Meanwhile, concerns among investors grew as both German and U.S. authorities moved substantial amounts of seized BTC. Adding to the unease was the announcement by the defunct cryptocurrency exchange Mt. Gox that it would commence repayments to creditors in early July, raising fears about the uncertain quantity of bitcoins—ranging from 65,000 to potentially 140,000—worth nearly $9 billion at the upper end.
Bitcoin initially lost its stable ground near $67,000, finding support near $61,000, but subsequently slipped further after breaking another critical support level around $60,000, suggesting a possible descent into freefall as of the latest update.
As of the time of publication, Bitcoin was trading at $56,723. Despite these fluctuations, it is important to note that investment decisions should be made with caution, recognizing the speculative nature of the market where capital is always at risk.
