Author: 1912212.eth, Foresight News
After Bitcoin hovered above the 60,000 integer mark for several days, the market finally chose to "accelerate" downward today. After lunch, it fell through more than 58,000 and 57,000 integer marks in succession. The lowest intraday price once dropped to $56,952, a new low in nearly two months. Ethereum also fell from $3,300 to $3,126. Driven by the two, the crypto market ushered in a general decline. In the Binance USDT market, there were less than ten non-stable currency assets with positive gains in the past 24 hours, and ARB even hit its historical low of $0.71 during the day.
According to Coinglass data, in the past 12 hours, the total liquidation was US$207 million, of which long positions were liquidated for US$187 million.
What caused this round of deep correction in the "bull market" supported by a series of favorable factors such as "halving + ETF + election"? Is the bull market really over?
The German government sold about 10,000 BTC in half a month
Earlier this year, German police seized 50,000 bitcoins, then worth $2.17 billion, in a case related to the operation of a pirate website in violation of copyright law in 2013, the proceeds of which were then converted into bitcoins. The statement said that one of the two suspects voluntarily transferred the bitcoins to the Federal Criminal Police Office (BKA), and although no formal charges have been filed against the men, an investigation into subsequent commercial money laundering is ongoing. At the time, the police statement added that no final decision had been made on the use of the bitcoins.
These bitcoins finally began to be transferred and sold in June of this year, with a total of about 9,600 bitcoins sold, and the current position holds 40,359 BTC.
On June 19, 6,500 bitcoins were sold that day;
On June 25, at 5:20 pm, 400 tokens were transferred to the exchange and 500 tokens were transferred to other addresses;
June 26, 3:50 p.m., 750 transferred;
On July 1, at 4:26 p.m., 400 tokens were transferred to the exchange; then another 282.74 tokens were transferred to multiple exchanges;
July 2, 7:20 pm, 361.877 transferred to Flow Traders;
In today’s transfer, the German government transferred 1,300 BTC to the exchange at 4:25 pm, and transferred 1,700 BTC to an anonymous wallet address at 4:35 pm.
BTC finally fell below $57,000 at around 5:15 p.m. today, reaching a low of $56,952.
Mentougou's huge compensation has started testing small transfers
The Mt. Gox compensation issue has aroused market concerns. The selling pressure of up to 142,000 BTC and 143,000 BCH caused market panic on June 24, and the price of BTC dropped to around $60,000. However, since the transfer was not actually distributed at that time, the $60,000 mark was maintained. According to the official website documents disclosed earlier, the Mt. Gox trustee stated that the BTC and BCH repayment work will be started from the beginning of July.
It is July 4th. According to the latest data from the Arkham platform, Mentougou has conducted a test transfer at 12:00 today. The market has already started to fall sharply at around 9:00 today. Although the selling force is not from Mentougou, it has also cast a shadow on the market confidence in the future. After all, the large amount of selling pressure is ahead, and no one is willing to stand under the dangerous wall.
BTC spot ETF has net outflow for the first time after net inflow in the past 5 days
As an important data of buying and selling orders, Bitcoin spot ETF can be used to observe the buying and selling strength of the market. However, the data is not optimistic. According to SoSoValue, the total net outflow on July 3 reached 20.4495 million US dollars, which was the first net outflow after the net inflow in the past 5 days.
When we extend the timeline, the above chart clearly shows that when the net inflow of Bitcoin spot ETF is high, the price of Bitcoin tends to rise. When the net outflow of the day becomes larger, the price of Bitcoin falls significantly. In May, its continuous net inflow of funds provided support for the rise in Bitcoin prices, but in June, its total net outflow accelerated significantly, and funds were flowing out significantly.
How will the market outlook be?
QCP Capital said in its latest market analysis that BTC fell below the $60,000 support level under heavy selling pressure, and BTC miners showed signs of capitulation, which historically usually means that the price has bottomed out. The last comparable decline in computing power occurred in 2022, when Bitcoin was trading at $17,000. In addition, despite the severe sell-off in the crypto market, the options market remains optimistic, especially for ETH call options expiring in September and December.
QCP Capital believes that given the recent selling pressure from Bitcoin, driven by factors such as Mt.Gox, miners and government regulation, ETH has the potential for a stronger rebound due to the upcoming S-1 filing for Ethereum spot.
Andrew Kang, co-founder and partner at Mechanism Capital, was more pessimistic.
He said most market participants do not realize the severity of the potential decline in Bitcoin's 4-month range. The closest analogue we can find is the May 2021 range, when Bitcoin and altcoins also experienced a parabolic rise. Crypto leverage above $50 billion here is also close to all-time highs (excluding CME), but in this case, our range is longer (18 weeks vs. 13 weeks) and has not yet seen the extreme whipsaws we experienced several times during the 2020-2021 bull run.
He also said that the initial estimate of a low of $50,000 may be too conservative and we may see a more extreme correction to the $40,000 range. Such a correction could be quite damaging to the market and could require several months of volatility/downtrend (recovery period) before a reversal to the upside could occur.