Bitcoin’s bearish momentum isn’t slowing down as its price has continued to decline following Thursday’s breakdown below the $60,000 support level.
According to On-chain analytics firm, WhaleWire, this is the second-largest liquidation event in Bitcoin’s history, surpassed only by the dip that followed FTX exchange bankruptcy filing in November 2022.
Factors Behind the Price Drop
JUST IN: On-chain data confirms this is the second-largest liquidation event in #Bitcoin's entire history, right after the #FTX collapse in November 2022.This comes amidst news that Germany is selling $3.5B worth of seized $BTC, and Mt. Gox begins paying back $8.5B to… pic.twitter.com/Cf1GJgU1ga
— WhaleWire (@WhaleWire) July 5, 2024
Several key factors have contributed to this massive liquidation event:
German BTC Sales: The German government has initiated the sale of $3.5 billion worth of seized Bitcoin.
Mt. Gox Repayments: Mt. Gox has started the process of repaying $8.5 billion to its creditors. There is FUD that the creditors will soon begin dumping their BTC.
Market Sentiment: The combination of these large-scale sell events has triggered a wave of panic selling.
Market Corrections Happen During Bull Rallies
Despite the price drop, it’s important to understand that such corrections are very common during bull markets. Bitcoin and the overall crypto market have previously recovered from major price dumps.
UPDATE: We've got another amended S-1 from @BitwiseInvest for their #Ethereum ETF. Expect more from other issuers throughout the rest of the week. We're thinking these things could potentially list later next week or the week of the 15th at this point. pic.twitter.com/xqVlt9lSGy
— James Seyffart (@JSeyff) July 3, 2024
The general market has hope for the upcoming launch of spot Ethereum ETF, as it is expected to bring more capital into ETH and other altcoins. This could change the whole bearish sentiment quickly.
Popular Bloomberg analyst James Seyffart thinks the ETH ETF could start trading around July 15. Many other analysts suggest we could see the ETFs this month or in August, which could make the market recover, just like it happened with Bitcoin ETF approvals.
Read more: Why Is the Crypto Market Down Today?
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