Bitcoin prices recently fell below $65,000, affected by the German government's sell-off and outflows from Bitcoin ETFs. Although major players such as MicroStrategy continue to buy on price dips, overall market sentiment remains cautious as the first half of the year comes to an end, bringing huge volatility.
According to Santiment, as the price of Bitcoin fluctuates between $65,000 and $66,000, traders are generally fearful and uninterested in Bitcoin. Despite this fear, when traders sell their Bitcoin holdings and large investors buy, the market tends to rebound, rewarding patient investors.
The main reasons why Bitcoin bear market is prevalent
German government sells off shares
The bearish trend in Bitcoin prices may be related to the German government’s selling spree. According to Arkham Intelligence, Germany transferred $65 million worth of Bitcoin to exchanges such as Coinbase, adding to the downward pressure on Bitcoin. Previously, the German government transferred $130 million to exchanges such as Kraken and Bitstamp. These actions stemmed from Bitcoin seized from the pirated website Movie2k.to in 2013. Currently, they still hold $3.05 billion worth of BTC.
ETF outflows
Bitcoin ETFs also experienced massive outflows as governments sold off, further exacerbating the price decline. The lack of investor confidence exacerbated the bearish sentiment in the market.
Nvidia’s Impact on BTC
In stark contrast to Bitcoin’s woes, the U.S. stock market has performed well, especially driven by tech giants such as Nvidia, whose market value has soared to $3.4 trillion, larger than France’s GDP and the entire cryptocurrency market. The strong performance of the stock market, coupled with speculation that the Federal Reserve may cut interest rates before November, may bring some hope for a recovery in the cryptocurrency market.
Buy on dips
Despite the bearish trend, large entities such as MicroStrategy are taking advantage of lower prices to profit, indicating confidence in the future bull run. However, the overall market, including traders and institutions, remains pessimistic at the moment.
Where will BTC price go next?
Interestingly, after a strong breakout above $72,000 earlier this month, Bitcoin prices began to fall, retracing more than 10% from their June highs. Having lost key support levels, Bitcoin is now at risk of falling to $60,000. According to historical trends, Bitcoin miners’ capitulation usually lasts for months after the halving. Analyst Willy Woo stressed that the recovery of Bitcoin prices depends largely on the exit of weak miners from the market and the subsequent recovery of the hash rate.
in conclusion
Judging from the latest price action, bears have shown a huge advantage as Bitcoin price breaks below major support levels. On the other hand, traders and institutions do not seem optimistic, while whales are preparing for the upcoming bull run, which has not yet begun.
