CoinW reports:
Source: CoinW
Author: Web3 Watch
According to CoinW market data, as of 12:00 on July 5th, Bitcoin has dropped below $54,000, currently trading at $53,984, marking a daily decline of 7.1%. Ethereum also fell below $2,850 with an 11% intraday drop. Other altcoins experienced widespread declines, with ORDI, PEOPLE, ZK, AEVO, BAKE, and YGG all plummeting over 20%, and ARB hitting a historic low. Concurrently, the US Dollar Index (DXY) dropped below 105 for the first time since June 13th.
(CoinW cryptocurrency market prices)
The recent drop in Bitcoin below $54,000 is expected to trigger liquidation of $620 million worth of long positions in major centralized exchanges (CEXs), leading to further increases in liquidation counts and amounts.
The crypto market has experienced a catastrophic decline, influenced by multiple bearish factors, including ongoing Bitcoin sales by the German government, Mt. Gox debt repayments, and net outflows from Bitcoin ETFs.
Mt. Gox, initiating debt repayments, triggered significant sell-offs
Recently, Mt. Gox wallets have been involved in frequent transfers, starting repayment settlements, causing concerns over potential selling pressure in the market.
According to Arkham monitoring, approximately one hour ago on July 5th, an address beginning with 1L7Xbx transferred 2,702 Bitcoins into Mt. Gox’s cold wallet, which were subsequently moved to Bitbank (one of the platforms facilitating Mt. Gox repayments). Additionally, Mt. Gox transferred 47,228 Bitcoins (about $2.71 billion) from cold storage to new wallets.
Furthermore, on-chain monitoring data shows that Mt. Gox-related address 1L7Xbx…6onk transferred 47,228 Bitcoins (approximately $2.7 billion) to two addresses:
– Address 16ArP3…VqdF: received 44,500 Bitcoins, valued at about $2.55 billion
– Internal address 1JbezD…APs6: received 2,700 Bitcoins, valued at about $154.8 million
Germany and the US governments initiate market sell-offs
The German government’s selling actions were first noted. In early June, a wallet identified as “German government” began transferring 50,000 Bitcoins seized from the Movie2k piracy site operator, selling approximately 4,736 Bitcoins in batches that month. Within the past week, the German government has sold over 2,000 more Bitcoins. Following this morning’s market downturn, the German government was observed transferring and selling 13,475 Bitcoins, having sold 13,000. Currently, the German government still holds over 40,000 Bitcoins.
Additionally, the US government’s BTC holdings, dormant for a year, sent 4,000 BTC to Coinbase on June 27th, potentially signaling the start of a selling mode. Yesterday, the “US government” wallet address (starting with 349c6) was monitored transferring 237 BTC to an address starting with bc1qvc.
Combined with net outflows from US spot Bitcoin ETFs, market panic accelerated. Data indicates that 9 Bitcoin ETFs collectively reduced holdings by 609 Bitcoins, valued at approximately $35 million. On July 3rd, net outflows from US spot Bitcoin ETFs amounted to $20.5 million.
Continued net outflows from Bitcoin spot ETFs for two consecutive days
Furthermore, Bitcoin spot ETFs serve as crucial indicators for market trends. Data reveals that Bitcoin ETFs have seen net outflows for two consecutive days, totaling $34.2 million.
From the net flow of Bitcoin ETFs, Markus Thielen, founder of 10x Research, estimated that the average entry price for Bitcoin ETF buyers was between $60,000 and $61,000. Therefore, when Bitcoin fell below $60,000 yesterday, it likely triggered an ETF liquidation wave, further driving down Bitcoin prices.
Additionally, the absence of new capital inflows has been a significant factor in the market’s inability to meet expectations. Since mid-last year, the total market value of stablecoins in the crypto market has steadily increased, corresponding to a bullish trend at the time. However, since early May, with stablecoin market value hovering around $160 billion for over two months, there have been no new inflows, indicating insufficient liquidity in the market to support an upward movement.
Bitcoin falls below the 200-day moving average, questioning the bull market cycle
Bitcoin’s price has dropped below the 200-day moving average (DMA), currently at $58,373. This marks the first time Bitcoin has fallen below this critical technical indicator since August 2023. Prices had risen steadily since early 2024, peaking above $70,000 in March. However, the recent breach of the 200 DMA suggests the market may be entering a correction phase.
According to Glassnode data, the historical interaction between Bitcoin and the 200 DMA has been a reliable indicator of bullish or bearish trends. Typically, breaking above the 200 DMA signals a significant upward trend, while falling below suggests a long-term bear market phase.
Current price trends warrant caution and may indicate the end of the recent bullish cycle. This dynamic suggests significant pressure on the Bitcoin market during the adjustment phase post-halving. Investors should closely monitor future price movements to gauge the market’s next trend.