On July 5, the cryptocurrency market experienced another sharp decline, with Bitcoin falling to around 54,000,andnumerousaltcoinsdippingbelowtheirlowsduringthe2022bearmarket.Bitcoincontinuedtodrop,triggeringpanicsellingamongaltcoins.AccordingtoCoinGecko,theglobalcryptocurrencymarketcapitalizationhasfallenbelow2.1 trillion, with a 7.81% decline in the past 24 hours.

The immediate cause of this decline is the significant selling pressure faced by Bitcoin, while the underlying reason lies in the uncertain outlook for interest rate cuts in the macroeconomic environment. It remains unclear when the market will recover.

The key factors contributing to this round of decline include:

Mt.Gox BTC Repayments: The exchange has begun repaying some creditors with lost Bitcoins, which are expected to be released gradually over the coming months, adding selling pressure to the market.

Government Sales: Governments such as Germany and the United States, which hold significant amounts of Bitcoin, have started selling their holdings, further exacerbating market pressure.

Miner Sell-offs: Following Bitcoin's halving, miners' incomes have plummeted, leading some inefficient miners to exit the market. Additionally, miner groups have increased their selling efforts.

Slowdown in Institutional Buying: The inflow of funds into Bitcoin ETFs has noticeably slowed down, resulting in insufficient market liquidity.

Weak Macroeconomic Outlook: The Federal Reserve's reduced expectations for interest rate cuts have fueled market concerns about insufficient macro liquidity.

For the future market, a Fed rate cut remains the fundamental driver for an upturn. Moreover, the upcoming US election, with Donald Trump and Joe Biden's escalating battle over cryptocurrency, could potentially benefit the crypto industry. However, in the short term, the market has likely reached a temporary bottom, but it still needs time to absorb the selling pressure. For instance, the repayment process of Mt.Gox could take up to three months. Therefore, the short-term market outlook remains uncertain.