Bitcoin traders predict a price drop to as low as $50,000 in the coming weeks. The cryptocurrency, which hasn’t seen these levels since mid-February, is under significant selling pressure. A trader highlighted, “The German government still holds over $2.3 billion worth of Bitcoin, Mt. Gox has more than $8 billion, and the US government has over $12 billion.”
Recent Price Decline
According to CoinGecko data, Bitcoin (BTC) prices have plummeted more than 10% in the past week. This fall brought BTC below a critical technical indicator on Thursday, wiping out all gains made since the end of February.
Government and Mt. Gox Wallet Activity
Trading firms like QCP Capital attribute the bearish sentiment to wallet activity from a German government entity and the now-defunct crypto exchange Mt. Gox. Market analysts predict further declines. Rachel Lin, founder of on-chain crypto exchange SynFutures, stated, “Bitcoin selling pressure is unlikely to decrease in the coming days. The German government holds over $2.3 billion in Bitcoin, Mt. Gox has $8 billion, and the US government possesses over $12 billion.”
Lin further explained that the market expects most Mt. Gox users to sell their tokens. “If the selling pressure is lower than expected, we might see a bounce back. However, significant selling could push the price down to $50,000 soon,” she added.
Technical Analysis and Market Sentiment
Alex Kuptsikevich, a senior market analyst at FxPro, echoed this sentiment. In an email to CoinDesk, he noted, “Bitcoin dropped below the 200-day moving average and hasn’t bounced back, staying within established patterns. From this position, a further drop to $51,000 is more likely than a rise to $65,000.”
Impact of Mt. Gox and German Government Actions
On Friday, Mt. Gox began distributing bitcoin and bitcoin cash stolen in a 2014 hack, causing an 8% drop in BTC as traders reacted. Additionally, a wallet connected to the German Federal Criminal Police Office (BKA) has transferred millions of dollars worth of bitcoin to crypto exchanges since mid-June. These movements suggest an intention to sell assets seized from a 2013 piracy marketplace.
Brief Recovery and Market Volatility
Despite these factors, BTC prices briefly recovered mid-morning in Europe, rising to nearly $55,000 from a low of $53,600 in early Asian hours. However, the sudden drop led to over $550 million in crypto longs, or bets on higher prices, being liquidated in the past 24 hours.
Conclusion
The Bitcoin market is experiencing significant volatility due to large-scale selling pressures from government entities and Mt. Gox. Traders and analysts are closely watching these developments, anticipating potential price drops to $50,000.
