Bitcoin (BTC), experienced a dramatic drop on Thursday, falling to as little as $56,700. Bitcoin (BTC) is facing several obstacles, such as the political uncertainty in the US and the sale of BTC by the German Government. This level was not seen since the 1st May. This has led to an almost 20% correction in the price of Bitcoin. Investors are concerned.
Bitcoin: Unraveling the Price Drop
Bloomberg reported that a study was conducted on the subject. reportInvestors are pondering possible scenarios in the event that President Joe Biden withdraws his bid for reelection. The emergence of an even stronger Democratic opponent who can challenge Republican Donald Trump whose agenda is favorable to the crypto industry, could be one possible scenario.
Richard Galvin highlights the possibility of an attack on the hedge fund Digital Asset Capital Management. “stronger Democratic candidate” Who might not be able to support cryptocurrencies Bitcoin’s short-term weakness is influenced by this factor.
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The collapse of the Mt. Gox Bitcoin case. The exchange plans to refund customers who were affected by the hack that occurred nearly 10 years earlier.
Investors closely monitor the risks of Bitcoin dispositions by US and German authorities who have confiscated BTC. Arkham Intelligence data shows that an account associated with Germany’s state has transferred around $75 million in Bitcoin. BTC The exchanges that took place on Thursday are the latest in a long line of such transfers.
Administrators of the Mt. Gox is gradually returning Bitcoins to its creditors. Speculators are unsure of what impact the 8 billion dollars could have on the Bitcoin market.
The Miners’ Reaction and Market Impact
Bitcoin miners, who are responsible for computing power required to support the Bitcoin blockchain, continue to be faced with the financial consequences The event “Halving” reduces the amount of tokens that players receive.
In response to this, certain miners sell a part of their inventory and add selling pressure for Bitcoin. Noelle Acheson of Crypto Is Macro Now, an author who writes the Crypto Is Macro Now Newsletter, has highlighted how this ongoing struggle with miners’ selling pressure is impacting Bitcoin’s performance.
Acheson does note that market sentiment can be quickly changed, especially when the currency is weak. US economic data Expectations of a looser Federal Reserve monetary policy.
The potential for US Exchange-Traded Funds (ETFs), to be approved, to invest in Ethereum may also boost the mood of the market. Moreover, over time the perception of US political events may change.
Matt Hougan is the Chief Investment Officer of Bitwise. He suggests that a possible change in the Democratic Party’s top leadership will improve the position of cryptocurrencies. Washington’s approach to cryptocurrencies is important, he says. digital assets Positive changes have occurred in the last year.
Glassnode predicts a retest of previous all-time highs
Jan Happel, the founder of Glassnode’s blockchain analytics platform, and Yan Allemann maintain that Bitcoin is their primary target. stating BTC should reach the area of $110,000 by the time the market reaches its peak.
Allemann und Happel note that the current consolidation is a test of the former all-time highest area. For this to occur, Bitcoin must first cross the key levels of $64,000, and then $70,000. This will require more market action and price development.
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According According to Julio Moreno the Metcalfe Price Valuation provides insight into the possible support level for Bitcoin’s price. Moreno says that the valuation of $56,000 is a key support level in Bitcoin.
Moreno said that, if Bitcoin fails to maintain this $56,000 key level, then the correction may become more serious, resulting in greater consequences for the markets.
BTC has returned to the $57,300 price level. However, cryptocurrency is down by 5% within the past day, and there are no immediate signs that bullish catalysts will allow it to rise above $65,000.
Image from DALLE and chart by TradingView.com
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Source: www.newsbtc.com
