New York, USA – Bitcoin traders are bracing themselves for a potential drop in prices to $50,000, a level not seen since mid-February. The largest cryptocurrency by market cap is facing significant selling pressure, with prices plummeting more than 10% in the past week alone. CoinGecko data reveals this sharp decline, as BTC falls below a crucial technical indicator and wipes out all gains accumulated since the end of February.
Market analysts and trading firms like QCP Capital point to various factors contributing to the bearish sentiment surrounding Bitcoin. Activities from a German government entity and the now-defunct crypto exchange Mt. Gox are cited as key reasons for the ongoing market turbulence. This has led to predictions that selling pressure on Bitcoin is unlikely to diminish in the near future.
Rachel Lin, founder of on-chain crypto exchange SynFutures, emphasizes the significant holdings of Bitcoin by entities like the German government, Mt. Gox, and the US government. These entities collectively possess billions of dollars worth of Bitcoin, indicating a potential for continued selling pressure in the market. Lin suggests that if Mt. Gox users decide to offload their tokens, Bitcoin could see a further decline towards the $50,000 mark.
Echoing this sentiment, Alex Kuptsikevich, a senior market analyst at FxPro, highlights Bitcoin’s struggle to surpass the 200-day moving average. The inability to break above this key indicator may result in a further downward trend for Bitcoin, potentially revisiting the $51,000 level seen during the consolidation in February. Traders are closely monitoring these moving averages to gauge potential trading opportunities in the current market environment.
The movement of millions of dollars worth of Bitcoin from a wallet associated with the German Federal Criminal Police Office has raised concerns among traders. These transactions suggest an intent to sell assets that were seized back in 2013 from a piracy marketplace. While Bitcoin prices experienced a brief recovery during the European mid-morning session, the overall market sentiment remains cautious, with over $550 million in crypto longs liquidated in the past 24 hours due to the recent price fluctuations.