Comprehensive Analysis of the Current Crypto Market Will BTC See Another Bull Run with Prices Back in the FiveDigit Range

Author: Gargoyle
Translation by: TechFlow
Why the Sell-off of $BTC Happened? This is the result of a combination of factors, including the Mt. Gox incident, ETFs, halving, Germany, and more. I have prepared a comprehensive analysis of the current situation.
In the past week, Bitcoin has dropped from $71,000 to $57,000, a decrease of about 20%, something we have not seen in a long time.
Today, let’s understand why this situation has occurred and what the future holds for BTC.
Mt. Gox
This cryptocurrency exchange collapsed in 2014 due to a hack.
Last month, there were reports that Mt. Gox was about to start repaying its creditors.
Representatives of the exchange plan to distribute 142,000 BTC to customers (0.68% of the total Bitcoin supply).
Many are concerned that creditors may choose to sell the received Bitcoins. Given the amount of BTC they hold, this is sure to impact the market.
Additionally, just the concern of this possibility has led many to start selling their assets.
But that’s not all.
BTC ETF
Spot Bitcoin ETFs make the price of cryptocurrencies more dependent on the sentiments of large investors.
Currently, BTC ETFs hold 5% of the total Bitcoin supply.
Earlier this month, ETFs experienced further outflows, putting pressure on cryptocurrency prices.
Miners Facing Challenges
On April 20, 2024, Bitcoin went through a halving event, reducing miner rewards from 6.25 BTC per block to 3.125 BTC.
For miners to continue mining, an increase in the price of Bitcoin is necessary, which many are hopeful for.
However, the price hasn’t risen as expected, forcing many miners to sell their BTC now.
US Interest Rates
Lower interest rates make high-risk investments (like cryptocurrencies) more appealing.
Minutes from the Federal Reserve’s (FRS) meeting showed policymakers are hesitant to lower rates unless more data indicates inflation is moving towards the 2% target rate.
Germany
The German government holds a significant amount of Bitcoin and has begun to liquidate its assets.
According to Arkham’s data, the German government recently transferred 400 BTC to Bitstamp, Coinbase, and Kraken exchanges.
Over the past two weeks, a total of 2,700 BTC has been moved from the government’s wallets to exchanges.
All these factors have contributed to the market conditions we see today. However, there are factors supporting a potential rise in Bitcoin, which we will discuss in detail.
Major Investors are not Selling BTC
Despite the fall in Bitcoin prices, companies are not selling their assets. Instead, many are buying BTC during the price drop.
Even though capital needs to be freed up, the largest miner, Marathon Digital Holdings, has not disposed of its assets.
It is worth noting that miner capitulation may signal a trend reversal.
Statistical data shows that Bitcoin typically starts rising about four months after a halving event.
If history repeats itself, bulls may start overpowering bears before the end of summer.
Community
According to Santiment’s data, more and more people are calling for “buying on the dip” on social media.
Bitcoin is considered particularly attractive when priced below $60,000.
The graph below shows statistical data on calls to buy Bitcoin across various social networks.
Expectations of Fed Rate Cuts
While most market participants are confident that the Federal Reserve will not cut rates at the end of July meeting, representatives have hinted that investors may see rate cuts later this year.
US Presidential Election
The US crypto community is rapidly expanding, and presidential candidates are not ignoring this issue.
Following recent debates, there is a belief that Donald Trump, who has publicly pledged support for crypto market development, could win the presidency.
If he wins, the head of the SEC may be someone favorable to cryptocurrencies.
In Conclusion
I have analyzed the positive and negative factors of the current market. I do not want to impose any viewpoint on you; you should conduct your analysis and formulate your strategies.
Personally, I believe Bitcoin is a very good long-term investment (at least 4 years). I am optimistic about the future of cryptocurrencies and believe the market conditions are favorable.