Author: Tom Mitchelhill, CoinTelegraph; Translated by: Deng Tong, Golden Finance
On July 5, the price of Bitcoin on Coinbase fell to $53,600, the first time the asset has traded at that price since February, and analysts feared the worst was yet to come.
As of the time of publishing, Bitcoin is trading at a steady $54,122, according to TradingView.
On July 5, Bitcoin fell to $53,600 on Coinbase. Source: TradingView
Josh Gilbert, a market analyst at eToro, said in an interview that much of the sell-off can be traced back to the panic caused by the repayment of Mt. Gox creditors, and that starting this month, about $8 billion worth of Bitcoin will be released to the market.
Following the abrupt drop to the $53,600 level, Gilbert said he expects Bitcoin’s price action to deteriorate in the coming days.
“The news flow right now is more bearish than bullish, and the selling activity we’re seeing is clearly unsettling investors, which tends to drive more selling,” Gilbert said.
“I would not be surprised if the asset tests $50,000 within the next week, but this will be a critical support level.”
He added: “There will be weakness in the short term until we receive a catalyst to push prices higher, which could come in the form of investors ‘buying the dip’ or an ETH ETF approval improving sentiment.”
Similarly, Swyftx analyst Pav Hundal noted that the worst for Bitcoin’s price action may be yet to come.
“A massive Bitcoin wall is about to meet an already apathetic market. Long-term macro conditions remain positive, but short-term we could be testing $50k, or even lower. $52k is currently a key battleground for bears and bulls.”
Analysts at 10x Research also predicted that Bitcoin prices could continue to fall to $50,000 in the coming weeks, warning that the "sell-off could accelerate as support levels are broken and sellers scramble to find liquidity."
Reasons to be optimistic about Bitcoin
Gilbert said that despite the bearish short-term outlook, investors also have reasons to remain bullish over the longer term.
“We expect catalysts such as a rate cut by the Federal Reserve in September, and potentially another rate cut in December, to boost prices.”
He added: “Most importantly, the SEC fully accepts the Ethereum ETF and launches it in July, which will be a huge boost to the cryptocurrency market.”
