After a brief surge above $71,000 in early June, Bitcoin (BTC) has experienced its most significant decline of 2024. The cryptocurrency initially broke through its stable level near $67,000, followed by a collapse through multiple support zones.
By July 5, the price of Bitcoin had plummeted to $54,413 – the lowest point since late February.
While there are various theories for BTC’s decline, investors are increasingly focusing on a combination of factors that could lead to substantial selling pressure.
For weeks, the German government has been transferring the approximately 50,000 Bitcoin it seized earlier in 2024 to crypto exchanges, while cryptocurrencies in U.S. custody have also been on the move.
In the early hours of July 5, Mt. Gox, a Bitcoin exchange that went bankrupt ten years ago, announced it would begin repaying its creditors – a move that had been anticipated since May.
The massive movements of nearly 100,000 BTC from German and Mt. Gox holdings have unsettled investors. However, the fear of a major selloff triggering a crypto market crash is equally likely, if not more so.
Despite the significant corrections that are common in the crypto markets, the current downturn could be particularly hazardous. Bitcoin has breached several crucial support levels, indicating a potential freefall to or below $50,000.
In recent months, BTC has consistently bounced off the $65,000 mark. Even during the May drop, when Bitcoin briefly fell below $57,000, it quickly rebounded. The key support levels were evident during the ongoing decline as Bitcoin stabilized near $61,000 and spent several hours above $57,000 on July 4.
Please note that the information provided should not be considered financial advice. Investment in cryptocurrencies carries risks, and your capital is at stake.
