The cryptocurrency market volatility is at its peak now, with Bitcoin leading the downturn. Recent events revolving around Bitcoin news today, include the Mt. Gox repayment announcement and the crypto market's bearish sentiments, have contributed to a sharp decline in Bitcoin's price. The factors pushing this crash in the current crypto market have been tackled in this article for a close-up look at what to expect.
Reason Behind Bitcoin Crash: Will Bitcoin Crash to Zero?
Despite the recent Bitcoin's price performance, that has taken a substantial hit, dropping over 6% in the past 24 hours and dipping below the 60K support level.
And noting the slight adjustment of over 60K in the past hour, as it is currently trading at approximately $60,210, it is unlikely to crash to Zero anytime soon.
As this sharp decline marks over 12% decrease over the past month, bringing the cryptocurrency to its lowest ever in six weeks.
The price of Bitcoin remains high on the long run, with a positive 6 months performance of 41%.
Yet the reasons for this crash were mostly:
1- Mt. Gox repayment announcement
The Mt. Gox repayment announcement is a significant factor behind this drop. The now-defunct exchange is set to distribute $9 billion in Bitcoin and Bitcoin Cash starting in early July, causing market jitters about an influx of supply.
An analyst from Bitget Research noted, "The repayment in Bitcoin is causing market worries about the influx of supply, and it's likely that beneficiaries will sell their coins to capitalize on the significant gains made over the last decade."
However, as also mentioned in a recent analysis, Bitcoin might withstand this pressure due to favorable macroeconomic factors, including high liquidity levels and potential rate cuts.
2- Investor Sentiment and Market Behavior
The broader market sentiment is also contributing to Bitcoin's decline. According to Crypto analysts, there's a fundamental shift in market mood, with Bitcoin no longer tracking with the Nasdaq, which recently hit record highs. This shift is occurring alongside rumors that major holders, including some of the largest miners and even the German government, are offloading their Bitcoin holdings.
Analysts warned that Bitcoin trading below critical support levels could lead to further declines even reaching 50k and below. Others predict a potential 8%-12% correction towards $60,000. This forecast has already seen partial fulfillment, with Bitcoin's current price at $60,210. Ethereum and other major cryptocurrencies have also felt the impact, with ETH dropping 5.16% to $3,293.
Bitcoin Crash Lead to Market Crash: Any Recovery SOON?
The global cryptocurrency market cap has decreased by 2.37% to $2.29 trillion, with the total market volume increasing by 23.68% to $42.51 billion. Yet, in the latest Bitcoin news, its dominance has slightly risen to 54.15%, reflecting its influence over the market. Other notable cryptocurrencies have mirrored Bitcoin's decline, indicating a broad bearish trend. However, due to the volatile nature of the crypto market, recovery soon is still foreseen by analysts, but as always, it all depends on major factors and news rather than just the current ones occurring.
The cryptocurrency market is undergoing significant changes, driven by multiple factors already addressed above and certainly that of the upcoming ETF launches. While Bitcoin today faces immediate challenges, there is potential for altcoin rallies and an Ethereum price reversal in the near future. Investors should stay informed and prepared for volatility in the coming weeks.
