Bitcoin Plummets to $53K, but analysts warn the worst isn’t over

Bitcoin plunged to a low of $53,600 on Coinbase on July 5, marking its lowest point since February. The cryptocurrency has since steadied, currently trading at $54,122 according to TradingView.

Josh Gilbert, a market analyst at eToro, linked the significant sell-off to anxieties over Mt. Gox’s impending creditor repayments, which are expected to release approximately $8 billion worth of Bitcoin into the market this month.

After the sharp drop to $53,600, Gilbert anticipates further declines in Bitcoin’s price in the near future. He noted, “Currently, the news flow leans more towards the negative, and the noticeable selling pressure is clearly impacting investor sentiment, typically triggering further sell-offs.”

He wouldn’t be surprised if Bitcoin approached the $50,000 mark soon, a critical psychological threshold. “Expect short-term weakness until a positive catalyst emerges, possibly from investors capitalizing on the price drop or the approval of an Ethereum ETF, which could enhance market sentiment,” Gilbert added.

Echoing similar concerns, Pav Hundal from Swyftx commented on the potential for more downturns. “We’re facing a significant influx of Bitcoin in a market that’s already showing signs of indifference. While the long-term outlook remains optimistic, the immediate future could see prices testing $50k or even lower. Currently, $52k is a critical level contested by both bears and bulls,” Hundal explained.

Analysts at 10x Research also foresee a potential further slide to $50,000 in the weeks ahead, cautioning that a break in support levels might trigger a rush by sellers to secure liquidity.

Reasons to be bullish about Bitcoin

Despite the immediate bearish sentiment, Gilbert highlighted several reasons why investors should maintain a positive outlook over the long term. “We’re anticipating potential rate cuts by the Federal Reserve in September and possibly December, which could uplift the market,” he stated.

Furthermore, Gilbert emphasized the significant impact that the SEC’s approval of an Ethereum ETF, expected to launch in July, could have on the broader cryptocurrency market.

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