Bitcoin Warning: Experts Predict Drop to $50K
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Written by
Yana Levkovich - Updated 2024-07-04 18:06:27
Experts at 10x Research predict that Bitcoin will drop below $57,000 from its current price of over $60,000 on July 4. They believe this sharp decline may continue, potentially falling further to around $50,000.
This move from the $60,000 mark down to $50,000 signifies a significant shift in market sentiment. According to 10x Research, this change is due to a slowdown in buying activity and an increase in selling pressure.
Markus Thielen, an analyst at 10x Research, mentioned that the downward trend was anticipated. He explained, “Our data from early June already indicated an overbought market that was ready for a correction.”
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Implications for Bitcoin Investors
The sudden 5.44% drop in Bitcoin's price has had a substantial impact on investor sentiment and market liquidity. This effect is evident in Bitcoin’s market capitalization, which stands at $1.1 billion, and a 57% rise in trading volume.
The 10x Research report highlighted that breaking the key level for Bitcoin miners and spot Bitcoin ETF buyers could accelerate the price decline. As support levels break, sellers are scrambling to find liquidity.
This sell-off coincides with the expected repayments from Mt. Gox, totaling $8.5 billion worth of Bitcoin, which are set to begin in July.
According to the 10x Research report, after breaking the $60,000 support level, only poorly informed traders are willing to buy at this price.
Bitcoin Price Forecasts
The report maintains a cautious outlook for Bitcoin's price, advising traders to focus on risk management in preparation for continued volatility. They stated, “We warned that this was not the time to be complacent.”
Profits Taken by Long-Term Bitcoin Holders
A recent analysis from IT Tech attributes the downward trend to long-term holders cashing in on significant profits.
On July 3, the Spent Output Profit Ratio (SOPR) for long-term holders exceeded a value of 10. This indicates that Bitcoin was sold for at least ten times the initial purchase price.
According to the analysis, long-term Bitcoin holders, who typically retain their holdings for roughly five to seven years, have contributed to the increased selling pressure in the market. These holders are now taking profits, which adds to the downward momentum.
