Bitcoin traders are closely watching as the price of the largest cryptocurrency drops to as low as $50,000. The selling pressure on Bitcoin (BTC) could reach billions of dollars in the coming weeks, leading to a significant decline in value.
Recent wallet activity from a German government entity and the distribution of bitcoins from the defunct crypto exchange Mt. Gox have contributed to a 10% drop in BTC prices over the past seven days. This downward trend has erased all gains made since the end of February, causing concern among traders and market analysts.
Rachel Lin, founder of on-chain crypto exchange SynFutures, warns that the selling pressure on Bitcoin is unlikely to decrease anytime soon. With over $2.3 billion held by the German government, more than $8 billion from Mt. Gox, and over $12 billion by the US government, the market is bracing for a potential dip to the $50,000 level.
Alex Kuptsikevich, a senior market analyst at FxPro, agrees that Bitcoin may continue to drop below the 200-day moving average. He suggests that a further decline to $51,000 is more probable than a recovery to $65,000, based on established trading patterns and moving averages.
The recent distribution of stolen bitcoins and bitcoin cash from the Mt. Gox hack in 2014, as well as the movement of funds by the German Federal Criminal Police Office, have added to the selling pressure on BTC. Traders are closely monitoring these developments, anticipating further price fluctuations in the near future.
Despite the market volatility, BTC prices experienced a brief recovery during the mid-morning hours in Europe, reaching nearly $55,000 after dropping to a low of $53,600 earlier in Asian trading. However, the sudden price fluctuations have led to over $550 million in crypto longs being liquidated in the past 24 hours, highlighting the risk associated with trading in the cryptocurrency market.
As Bitcoin continues to face selling pressure from various sources, traders and investors are advised to exercise caution and closely monitor market developments. The uncertainty surrounding the cryptocurrency market underscores the importance of staying informed and making well-informed trading decisions to navigate the evolving landscape of digital assets.