Bitcoin slumps below $59,000 amid market uncertainty

Bitcoin (BTC) On Thursday, its value fell below $59,000 and was trading at $58,827.

Market data shows Bitcoin has fallen by 3.38% over the past day, hitting its lowest level since early May despite expectations of a price recovery. Rachel Lucas, crypto analyst at Australia’s BTC Markets told The Block,

The drop below the $60,000 resistance line is significant, as it is a psychological barrier for many investors. […] If Bitcoin remains below this level, we could see increased volatility in the short term.

The main reason for the recent price fluctuations is the upcoming payment to Mt. Gox creditors, who are scheduled to receive about 142,000 BTC (worth about $9 billion) from July. This is after Mt. Gox Transfer of Bitcoin worth $840 million In late May, Lucas suggested this substantial repayment could put “considerable selling pressure” on the market.

Concerns about US inflation and interest rates are adding to the uncertainty. Federal Reserve Chairman Jerome Powell recently said Despite acknowledging progress, more work is needed to rein in inflation. The Fed’s indication of only one possible interest rate cut this year, contrary to investors’ expectations of multiple cuts, has boosted risk-averse market sentiment.

Analysts undecided on bitcoin’s direction

While some analysts believed July surge predicted for BitcoinCiting historical patterns, Bit.com Chief Marketing Officer Toya Zhang expressed skepticism. Zhang cited low market liquidity and a lack of new crypto narratives as obstacles to significant growth without interest rate cuts.

Zhang noticed a massive increase in sell orders on over-the-counter desks, indicating that high-net-worth individuals and family offices are profiting from the previous bull cycle. Recent data shows that trading volumes for US spot bitcoin have declined Exchange-traded funds (ETFs)Trading volume dropped to around $800 million on Wednesday.

Lucas concluded by forecasting continued volatility in bitcoin in the coming week as the market processes the Mt. Gox repayment and reacts to macroeconomic indicators. He added that a bounce could occur if market liquidity remains strong, as has happened after previous significant sell-offs.