Who is destroying the market? Bitcoin falls below $54,000, and the market is in mourning

Source: Bijie.com

Author: Web3 Sniff Observation

According to the Bijie.com market, at 12:00 on July 5, Bitcoin has fallen below 54,000 US dollars, and is now trading at 53,984 US dollars, with an intraday decline of 7.1%. Ethereum fell below $2850, with an intraday drop of 11%. Other altcoins generally fell, with ORDI, PEOPLE, ZK, AEVO, BAKE, and YGG all falling by more than 20%, and ARB falling to a record low. Meanwhile, the U.S. dollar index (DXY) fell below 105 for the first time since June 13.

(Bijie.com Currency Quotes)

This time the price of Bitcoin fell below US$54,000. It is expected that 620 million US dollars of long orders will be liquidated in the contract markets of major cryptocurrency exchanges (CEX), which will lead to The number and amount of liquidated positions further increased.

The catastrophic decline in the crypto market was affected by multiple bad news, including the German government’s continued selling of BTC, Mt. Gox’s debt repayment, and Bitcoin ETF net outflow indicators, which may be factors that caused the collapse of Bitcoin prices.

Mt. Gox begins to repay debt, triggering concerns about large-scale selling

Recently, Mentougou (Mt. Gox) wallet has made frequent transfers and has begun to repay compensation, triggering market concerns about potential selling pressure.

According to Arkham monitoring, on July 5, about an hour ago, an address starting with 1L7 One of the trading platforms for Mt. Gox repayment). Additionally, Mt. Gox moved 47,228 Bitcoins (approximately $2.71 billion) from cold storage to new wallets.

In addition, on-chain monitoring data shows that Mt. Gox related addresses 1L7 VqdF: Received 44,500 Bitcoins, worth approximately US$2.55 billion

- Internal address 1JbezD... APs6: Received 2,700 Bitcoins, worth approximately US$154.8 million

The German and US governments have successively "smashed the market"

The first is the sell-off by the German government. In early June, a wallet labeled "German Government" began to transfer 50,000 Bitcoins previously seized from the pirated movie website operator Movie2k to the trading platform, and sold approximately 4,736 Bitcoins in batches that month. In the past week, the German government has sold more than 2,000 Bitcoins. Just after the market fell this morning, the German government was monitored to move 13,475 Bitcoins and has sold 13,000 more. As of now, the German government still holds more than 40,000 Bitcoins.

In addition, the U.S. government’s BTC holding wallet, which has not been moved for a year, also sent 4,000 BTC to Coinbase on June 27, suspected of starting a currency selling mode. Yesterday, the "US Government" wallet address (starting with 349c 6) was monitored to transfer 237 BTC to the address starting with bc1 qvc.

Coupled with the net outflows from US spot Bitcoin ETFs, market panic is accelerated. Data shows that 9 Bitcoin ETFs have reduced their holdings of 609 Bitcoins, worth approximately US$35 million. On July 3, the U.S. spot Bitcoin ETF saw a net outflow of $20.5 million.

Bitcoin spot ETF has had net outflows for two consecutive days

On the other hand, Bitcoin spot ETF is an important reference for judging market direction. Data shows that the Bitcoin ETF has experienced net outflows for two consecutive days, with the total outflow amounting to $34.2 million in the two days.

Looking at the net flows of Bitcoin ETFs, 10x Research founder Markus Thielen said in his latest report that the average entry price of Bitcoin ETF buyers is estimated to be US$60,000 to US$61,000. Therefore, when Bitcoin fell below $60,000 yesterday, it may have triggered a wave of ETF liquidations, further dragging Bitcoin prices down.

In addition, the lack of new funds entering the market is also an important reason why the market cannot meet market expectations. Since the middle of last year, the total market value of stablecoins in the crypto market has grown steadily, corresponding to the continued rise of the market at that time, with obvious bearish to bullish signals. However, since the beginning of May, no new money has entered the crypto market, and the market value of stablecoins has been hovering around US$160 billion for more than two months. There is insufficient liquidity on the market, resulting in insufficient buying power to drive the market upward.

Bitcoin falls below the 200-day moving average, bull market cycle in question

Bitcoin price fell below the 200-day moving average (DMA), which is currently located at $58,373. This is the first time since August 2023 that Bitcoin has fallen below this key technical indicator. Bitcoin prices have been rising since the beginning of 2024, peaking at over $70,000 in March. However, the recent price break below the 200 DMA suggests that the market may be entering a correction phase.

According to data from Glassnode, Bitcoin’s interaction with the 200 DMA has historically been a reliable indicator of bullish or bearish trends. Typically, a price break above the 200 DMA signals a significant uptrend, while a break below signals a prolonged bear market phase.

BTC 200-day moving average, via Glassnode

Current price action needs to be treated with caution and may mark the end of the recent bull cycle. This development shows that the Bitcoin market is facing greater pressure during the post-halving adjustment process. Investors need to pay close attention to future price trends to determine the next trend of the market.

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