Bitcoin expected to experience significant selloff in the coming months dropping below 55000

CoinDesk reported:
Bitcoin fell 6% to $54,600 during weekend trading, despite regaining lost ground from the previous weekend.
Data from Decrypt shows that the world’s largest cryptocurrency by market capitalization dropped to a low of $54,000 on Friday. The asset is currently trading at $55,300.
Several unfavorable factors continue to weigh on Bitcoin, including uncertainty in the cryptocurrency market, potential selling pressure from the German government, and 127,000 creditors waiting for cryptocurrency funds from the Mt. Gox bankruptcy estate.
Prices briefly rose, attempting to regain a position above $58,000 before falling back to the lowest point since late February on Sunday.
According to Arkham Intelligence’s dashboard, Germany holds 39,826 BTC, valued at approximately $2.2 billion at current prices.
Meanwhile, users of the defunct Japanese exchange Mt. Gox are waiting to recover funds lost in a hack over a decade ago, totaling up to $7.7 billion.
Preparations for fund distribution are underway, with Mt. Gox’s repayments set to begin this month. The collapsed exchange plans to pay out approximately 142,000 BTC and 143,000 BTC in cash.
K33 Research mentioned Mt. Gox creditors in its latest report, stating, “While it is unclear what portion of the total allocation will be sold in the market, Bitcoin faces significant selling pressure.”
K33 added that summer typically brings calm to the cryptocurrency market, but with oversupply and downward momentum, traders may face busier periods than expected if more supply floods into thin order books.
Data from CoinGlass shows that the liquidation of the cryptocurrency market indicates long positions have evaporated to $175 million. Additionally, $35 million worth of short positions have been wiped out, totaling approximately $210 million.
Previously, there were massive sell-offs on Thursday and Friday, with $600 million liquidated after Bitcoin briefly fell below $55,000.
Venture capital firm Ryze Labs, focusing on Web3, told Decrypt that the broader market is experiencing the impact of liquidity shortages in the second quarter of 2024.
The Federal Reserve reported that its reverse repo balance surged by over $200 billion last week, reaching $664.5 billion, indicating a significant loss of liquidity.
Ryze Labs noted that the reduction in liquidity injections from China since February 2024 could also tighten global liquidity, potentially affecting cryptocurrency prices and exacerbating volatility.