In this THREAD, I will explain "Why is $BTC Retracing" with a detailed analysis of both technical and fundamental factors. ๐งต๐
1. Technical Analysis
- $BTC has dropped from $72,000 in the last 30 days.
- That's a retracement of -20%.
- Such a significant drop can be attributed to various technical indicators signaling a bearish trend.
- Moving averages have shown a downward crossover, indicating potential further declines.
- Relative Strength Index (RSI) has also dipped into the oversold territory, suggesting a bearish momentum.
2. Fundamental Analysis
2.1 ETF Outflows and Inflows
- $BTC ETFs hold 5% of Bitcoin's TOTAL supply.
- At the start of July, there was an outflow from ETFs.
- This outflow caused a temporary dip in $BTC prices as large quantities were moved out.
- Yesterday, there was an inflow of $143M, making the price bounce again.
- This movement has made investors and potential investors bullish in the current situation.
- The ETF inflows suggest renewed confidence among institutional investors, possibly hinting at a bottoming out of the recent decline.
2.2 MT.GOX
- This exchange collapsed in 2014 due to a hacking attack.
- MT.GOX is ready to repay its creditors they have been debting since 2014.
- They will distribute 142,000 $BTC.
- Those $BTC represent 0.7% of Bitcoin's TOTAL SUPPLY.
- The fear of a massive sell-off by these creditors has been looming over the market.
- However, structured repayment plans might mitigate sudden market impacts.
2.3 Miners
- $BTC Miners broke records in 2023 and 2024, becoming the TOP sellers.
- The pace of transfers to exchanges intensified in 2024.
- Miners selling their holdings can often indicate they are covering operational costs.
- This directly impacted the excess supply and low demand in the SPOT market.
- Increased miner selling usually leads to increased market volatility and price drops.
2.4 Retail and Beginner Investors
- Beginner investors are capitulating and increasing selling pressure.
- Approximately $2.4B worth of $BTC aged between 3-6 months moved on the network during the DUMP.
- This behavior is often observed when retail investors panic sell, exacerbating price declines.
- Experienced investors often see these moments as buying opportunities, adding to market dynamics
2.5 U.S. Interest Rates
- The lower the interest rate, the higher-risk investments.
- Policymakers are unwilling to lower rates until inflation moves toward the target rate of 2%.
- High-interest rates make holding cash more attractive compared to risky assets like $BTC.
- As a result, investors may liquidate $BTC holdings to seek safer returns.
2.6 Germany
- The German government owns a significant amount of $BTC and has started selling.
- The German government recently transferred 400 $BTC to the exchanges Bitstamp, Coinbase, and Kraken.
- In total, 2,700 $BTC have been moved to exchanges over the past two weeks.
- Government sales can cause market instability, as seen with Germany's recent transactions.
- The rationale behind the government's sale could range from profit-taking to portfolio diversification.
2.7 Global Macroeconomic Factors
- Geopolitical tensions and economic policies worldwide impact $BTC prices.
- Recent tensions in various regions have led to increased market volatility.
- Global inflationary pressures also affect investor behavior and asset allocation.
This comprehensive analysis sheds light on the technical and fundamental factors contributing to the recent retracement of $BTC. Understanding these factors can help investors make informed decisions in the volatile cryptocurrency market. ๐๐ก
By staying updated with both technical indicators and fundamental developments, investors can better navigate the complexities of the $BTC market and potentially capitalize on opportunities arising from these fluctuations.
