Source: CoinWorld

Author: Web3 Sniff Observation

According to the market data of Bijie.com, at 12:00 on July 5, Bitcoin had fallen below $54,000 and was now trading at $53,984, a daily drop of 7.1%. Ethereum fell below $2850, a daily drop of 11%. Other altcoins fell across the board, with ORDI, PEOPLE, ZK, AEVO, BAKE, and YGG all falling by more than 20%, and ARB falling to a record low. At the same time, the U.S. dollar index (DXY) fell below 10.5, the first time since June 13.

(Currency market information on Bijie.com)

This time the price of Bitcoin fell below $54,000, and it is estimated that $620 million worth of long orders will be liquidated in the contract markets of major cryptocurrency exchanges (CEX), which will lead to a further increase in the number of people and amount of liquidation.

The catastrophic fall in the crypto market was affected by multiple negative news, including the German government's continued selling of BTC, Mt. Gox's debt repayment, and the Bitcoin ETF net outflow indicator, which may be factors that led to the collapse of Bitcoin prices.

Mt. Gox begins paying down debt, sparking fears of massive sell-off

Recently, Mt. Gox wallets have been frequently transferring money and starting to repay compensation, triggering market concerns about potential selling pressure.

According to Arkham monitoring, on July 5, about an hour ago, an address starting with 1L7 Xbx transferred 2,702 bitcoins to the Mt. Gox cold wallet, and then these 2,702 bitcoins were transferred to Bitbank (Bitbank is one of the trading platforms that supports Mt. Gox repayment). In addition, Mt. Gox also transferred 47,228 bitcoins (about 2.71 billion US dollars) from cold storage to a new wallet.

In addition, on-chain monitoring data shows that the Mt. Gox-related address 1L7 Xbx ... 6onk has transferred 47,228 bitcoins (about $2.7 billion) to two addresses:

- Address 16ArP3 ... VqdF: Received 44,500 Bitcoins, valued at approximately $2.55 billion

- Internal address 1JbezD ... APs6: Received 2,700 bitcoins, worth approximately $154.8 million

The German and US governments have successively "dumped the market"

First, the German government's selling behavior. In early June, a wallet marked as "German government" began to transfer 50,000 bitcoins previously seized from the pirated movie website operator Movie2k to the trading platform, and sold about 4,736 bitcoins in batches that month. In the past week, the German government has sold more than 2,000 bitcoins. Just after the market fell this morning, the German government was monitored to transfer 13,475 bitcoins and has sold 13,000 bitcoins. As of now, the German government still holds more than 40,000 bitcoins.

In addition, the US government BTC holding wallet, which had not been moved for a year, also sent 4,000 BTC to Coinbase on June 27, which is suspected to be the start of the coin selling mode. Yesterday, the "US government" wallet address (starting with 349c 6) was monitored to transfer 237 BTC to the address starting with bc1 qvc.

Coupled with the net outflow of US spot Bitcoin ETFs, the market panic has accelerated. Data shows that the nine Bitcoin ETFs have reduced their holdings by a total of 609 Bitcoins, worth about $35 million. On July 3, the US spot Bitcoin ETF had a net outflow of $20.5 million.

Bitcoin spot ETF has net outflows for two consecutive days

On the other hand, Bitcoin spot ETF is an important reference for judging the market trend. Data shows that Bitcoin ETF has experienced net outflows for two consecutive days, with a total outflow of US$34.2 million in two days.

Judging from the net flow of Bitcoin ETFs, Markus Thielen, founder of 10x Research, said in his latest report that the average entry price of Bitcoin ETF buyers is estimated to be $60,000 to $61,000. Therefore, when Bitcoin fell below $60,000 yesterday, it may trigger a wave of ETF liquidations, further lowering the price of Bitcoin.

In addition, the lack of new funds entering the market is also an important reason why the market is unable to meet market expectations. Since the middle of last year, the total market value of stablecoins in the crypto market has grown steadily, corresponding to the continued rise of the market at that time, and the signal of a bearish turn to bullish is obvious. However, since the beginning of May, there has been no new money entering the crypto market, and the market value of stablecoins has been hovering around US$160 billion for more than two months. The lack of liquidity of funds in the market has resulted in insufficient buying power to drive the market up.

Bitcoin falls below 200-day moving average, bull market cycle questioned

Bitcoin price has fallen below its 200-day moving average (DMA), which currently stands at $58,373. This is the first time Bitcoin has fallen below this key technical indicator since August 2023. Bitcoin price has been rising since the beginning of 2024, peaking at over $70,000 in March. However, the recent price break below the 200 DMA suggests that the market may be entering a correction phase.

According to data from Glassnode, Bitcoin’s interaction with the 200 DMA has historically been a reliable indicator of bullish or bearish trends. Typically, a price break above the 200 DMA signals a significant uptrend, while a break below signals a prolonged bear market phase.

BTC 200-day moving average, from Glassnode

The current price trend needs to be treated with caution, and may mark the end of the recent bull cycle. This dynamic shows that the Bitcoin market is under great pressure during the adjustment process after the halving. Investors need to pay close attention to future price trends to determine the next trend of the market.