The price of Bitcoin fell to around $53.5 thousand during the first trading hours in Asia on Friday, hitting its lowest level in four months. This significant decline has worried investors and market analysts, as the value of Bitcoin (BTCUSD) has fallen by about 6% in the past 24 hours, according to BeInCrypto data.
The impact of the decline on the market
Investor Concern: This significant decline in the price of Bitcoin comes at a time of increasing market tensions regarding global monetary policies
Market Analysis: Analysts suggest that the decline may be due to a combination of factors including mass selling by investors, global market volatility, as well as potential regulatory updates.
What does this mean for investors? For investors in Bitcoin and other cryptocurrencies, this decline highlights the importance of carefully monitoring the market and understanding the factors that can significantly impact prices. Investing in cryptocurrencies can be risky, but understanding market volatility can help make better investment decisions.
Sharp decline in Bitcoin leads to liquidation of more than $589 million: Volatility in the price of Bitcoin and the cryptocurrency market in general has led to massive liquidations. In total, $589 million was liquidated, which included more than $511 million in long positions and $78 million in short positions. It is worth noting that nearly $100 million was liquidated in the past hour alone.
However, in an interview with BeInCrypto, Avinash Shekhar, CEO of cryptocurrency derivatives exchange Pi42, explained that price volatility represents an opportunity for short-term traders. Such moves usually present opportunities, especially for speculators to recover their liquidated trades,” Shekhar told BeInCrypto. Adding to market anxiety, the Mt.Gox bankruptcy administration transferred billions of dollars of Bitcoin to an anonymous wallet. According to blockchain analytics firm Arkham Intelligence, this included transferring 47,228 BTC, worth about $2.71 billion.
Recent actions from the German government have increased market anxiety
Before that, management conducted several small pilot transactions. With payouts expected to begin soon, approximately 142,000 BTC and 143,000 Bitcoin Cash (BCH) are scheduled to be distributed. In addition, recent actions from the German government have contributed to increased market anxiety. This week, it transferred around 1,300 BTC, worth an approximate $75.5 million, to its wallet and several cryptocurrency exchanges, including Bitstamp, Coinbase, and Kraken. This development has exacerbated fears of falling prices. Amid these developments, prominent cryptocurrency analyst Miles Deutscher expressed his frustration, suggesting a quick drop to $48,000 to end the current market turmoil.
“Can we just call it a day at $48,000 and be done with this suffering? Dear Germany and Mt.Gox – please, dump everything you have. Dear Retail, please, panic sell your low-conviction altcoins. Let’s end the pain quickly.” Then we just go up,” Deutscher wrote in a tweet. At the same time, cryptocurrency analyst Dave the Wave noted that Bitcoin has broken through a critical support level at $56.5K. He pointed out that the next important Fibonacci level, around $48,000, may provide the necessary support. Despite the market challenges, Dave the Wave maintains his optimism, reminding investors that the market is “technically still in a bull market.”
According to data from cryptocurrency analysis firm Several governments hold large sums of Bitcoin worth a total of around $17.8 billion at current market prices. The US government is estimated to hold about $12 billion worth of Bitcoin, most of which was seized in high-profile cases such as the 2013 Silk Road bust and subsequent operations against dark web markets. In 2020, the US Department of Justice seized more than $1 billion worth of Bitcoin linked to the Silk Road, marking one of the largest cryptocurrency seizures in history.
Bitcoin loses more than $3,000 today and falls to its lowest levels since February. The reasons behind the losses in Bitcoin and the crypto market
The market capitalization of the crypto market has fallen sharply over the past 24 hours, losing about $2.08 trillion. These losses came against the backdrop of Bitcoin falling by more than $3,200 to reach the level of $44,000, while Ethereum fell by more than $250. Here we review the possible reasons behind these large losses:
1. Global economic tensions:
Digital markets have been affected by growing concerns about global monetary policies and macroeconomic changes, prompting investors to dump digital assets in favor of safer assets.
2. Regulatory pressures:
Recent months have seen increasing regulatory pressure on cryptocurrencies in many countries. For example, calls have increased for tighter controls on cryptocurrency trading, which has negatively affected investor confidence in the market.
3. Making profits:
After a long period of significant rises, many investors started taking profits by selling their stakes in cryptocurrencies, causing prices to fall significantly.
4. Negative news:
Negative news related to cyber attacks on trading platforms or technical problems in cryptocurrency networks can lead to a decrease in confidence among investors and thus to a decline in prices.
5. Natural market fluctuations:
The cryptocurrency market is known for its high volatility, where large price movements can lead to ripple effects from automated trading and speculation.
Germany holds Bitcoin worth around $2.2 billion, which has been making headlines recently. In February 2024, German authorities announced plans to sell nearly 1 billion euros ($1.08 billion) in cryptocurrencies, mainly Bitcoin. The move represents one of the largest government cryptocurrency liquidations to date and has been closely watched by market participants and other governments holding seized digital assets.
Future repercussions
Investors should carefully follow market developments, as volatility could continue in the coming period. It is also important to monitor news related to economic regulations and policies that may affect the cryptocurrency market significantly.
This comes after some major factors continued to raise concerns in the cryptocurrency market and assets, which caused significant losses for Bitcoin in particular, including the German government’s decision to liquidate a large amount of its Bitcoin holdings and the imminent payment to the creditors of the cryptocurrency exchange Mt Gox. . Gox, which collapsed in 2013.
At the end of last month, the court-appointed official to oversee the company’s bankruptcy proceedings announced that MT Gox would begin compensating nearly 20,000 investors in July, which includes repaying more than 140,000 bitcoins (currently worth about $7.7 billion). Recently, more than $2.7 billion was transferred to a different address.
Shares of cryptocurrency mining companies also declined, as shares of Riot Platforms Inc, Marathon Digital, Hut 8 shares listed in the United States, and Bit Digital fell by rates ranging from 6.8% to 10.8%.
Shares of the software company that owns a giant Bitcoin portfolio, MicroStrategy, fell 8.6%, shares of Bitcoin mining machine maker Canaan Inc fell 4.5%, and shares of the ProShares Bitcoin Strategy ETF fell 10%.
