Bitcoin (BTC) plunges to five-month lows amid a series of whale sell-offs; Mt. Gox begins paying back creditors; and Circle receives first stablecoin license under MiCA amid increased regulation.
Market downtrend
Following June’s bear market, a July 1 report suggests Bitcoin could be headed for a recovery in July. This is based on historical performance and a strong start to the month.
However, Bitcoin’s rally came to an abrupt halt when it reached a one-week high of $63,861 on July 1. BTC has diverged from the currently bullish U.S. stock market as it fell below $63,000 and failed to recover that level.
Bitcoin is in a phase of indecision amid bearish pressure. BTC has suffered three consecutive intraday declines, falling below $59,000 on July 4 as signs of miner capitulation emerged.
Bitcoin falls to five-month low
The price of Bitcoin continues to hit new lows, falling below $57,000 on July 4, triggering selling by new holders.
Factors such as miner capitulation, whale exchange deposits, German government selling, and Mt. Gox repayments combined to exert more bearish pressure on BTC, ultimately leading to a drop to a 5-month low of $53,485 on July 5.
Bitcoin’s plunge affected the broader market, causing the altcoin market to fall. In addition, Bitcoin mining stocks also saw a sharp drop.
Meme Coin Rally
After the slump, Bitcoin began to recover and reclaimed $58,000 on July 6. However, while the first-of-its-kind cryptocurrency quickly lost steam, the memecoin recorded a stronger recovery.
Market data confirms that BONK, dogwifhat (WIF), PEPE, and BRETT all recorded gains of more than 15% in the 24 hours on July 6. Meanwhile, BTC has fallen back below $58,000.
Cryptocurrency funding activity was also relatively low last week, largely due to the July 4 holiday in the U.S. However, artificial intelligence (AI) research outfit Sentient received an impressive $85 million in seed funding. Several other startups also received venture capital.
German government distribution activities
The market crash was caused by a number of factors that all came close to selling pressure. The German government continues to distribute part of the 50,000 Bitcoins seized from the defunct piracy platform Movie2k.
The German government has been moving Bitcoin every day since July 1, moving a total of 7,070 BTC tokens last week, a trend that has exacerbated market pressures. As of now, the German government holds 39,826 BTC.
On July 4, Tron founder Justin Sun revealed that he was willing to buy the German government’s BTC from the market to reduce the impact of the sell-off. In addition, German lawmaker and Bitcoin advocate Joana Cotar asked the government to stop BTC sales.
At the same time, the US government, which holds a large number of Bitcoins, distributed part of its holdings last week, totaling 274 Bitcoins.
Mt. Gox begins repayments
The selling pressure was also exacerbated by repayments from Mt. Gox, which recently announced plans to begin repayments this month and conducted a series of test transactions on July 4 that confirmed its intention to transfer assets.
On July 5, the collapsed exchange transferred 47,228 BTC to a new address in preparation for repayment. The creditor eventually confirmed that repayments had begun on July 4 in BTC and Bitcoin Cash (BCH).
Circle receives stablecoin license under MiCA
As MiCA stablecoin legislation moves forward, Circle has received a license to provide stablecoin services around USDC across the EU under the new regulations, becoming the first stablecoin issuer to receive such a license.
Russia’s central bank may consider legalizing stablecoins to leverage them for trade with China.
Other regulatory developments
The European Banking Authority (EBA) has confirmed that it will expand the scope of its Travel Rule guidance to cover companies providing cryptocurrency services. The move, which will take effect on December 30, is aimed at strengthening anti-money laundering procedures.
In the United States, a judge has granted a motion by Ethereum development firm Consensys to speed up the timeline of its legal case against the Securities and Exchange Commission (SEC).
Galaxy Digital founder and CEO Mike Novogratz believes that the U.S. crypto industry will receive much-needed regulatory clarity regardless of who wins the upcoming presidential election.
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