Coin World reports:
Beneath the calm surface of the cryptocurrency market, undercurrents are stirring. Today, Bitcoin’s price suffered another significant blow, plummeting below the $55,000 mark and triggering widespread market attention. According to the latest data from Coinglass, as of press time, Bitcoin’s price has fallen to $54,887 per coin, with a steep 24-hour decline of 5.71%, catching investors off guard and once again exposing the vulnerability of the virtual currency market.
As the bellwether of digital currencies, Bitcoin’s every move affects the entire market’s nerves. This price plunge quickly spread throughout the virtual currency market, with the top 10 cryptocurrencies by market value almost all suffering losses, with declines generally ranging between 6% and 9%, leaving the market in widespread distress. More severe is the surge in liquidation events; in the past 24 hours, over 80,000 individuals in the virtual currency market have been liquidated, with the liquidation amount surpassing the $200 million threshold, resulting in heavy losses for investors.
Reflecting on Bitcoin’s trajectory this year, it has been a rollercoaster ride. Since reaching its all-time high of $73,798 per coin in March, Bitcoin has embarked on a prolonged decline. It first experienced “flash crashes,” breaking through the psychological barrier of $60,000, followed by a brief rebound to around $71,000 in June, offering the market a brief respite. However, the good times did not last long, and by the end of June, Bitcoin entered a mode of steep decline, with a drop of over 23% in nearly a month, severely shaking investor confidence.
So, what exactly caused Bitcoin’s recent sharp falls? Market analysis points to two main factors at play.
Firstly, the selling behavior of the German Federal Criminal Police Office directly impacted Bitcoin’s price. On July 4th, the agency transferred approximately $75 million worth of Bitcoin to well-known exchanges such as Coinbase, Kraken, and Bitstamp, which is just the tip of the iceberg. Since mid-June, the German government has sold over $390 million worth of Bitcoin, all originating from nearly 50,000 coins obtained illegally in 2013. Based on current prices, the total value of these Bitcoins is estimated to be around $2.7 billion, and such large-scale selling undoubtedly puts significant pressure on the market.
Secondly, the Bitcoin repayment plan of the Mt.Gox exchange became the final straw that broke the market’s back. Mt.Gox was once the world’s largest Bitcoin exchange, but it declared bankruptcy after a hacker attack in 2014, resulting in substantial customer fund losses. After years of legal battles and asset recovery efforts, the Mt.Gox trustee finally announced that it would begin repaying victims in Bitcoin and Bitcoin Cash in early July 2024. Data shows that as of the end of June, the Mt.Gox trustee holds about 140,000 Bitcoins, valued at approximately $9.26 billion. The news raised widespread concerns that a large amount of Bitcoin would be sold off, leading to panic selling in the market.
Despite the recent immense pressure on Bitcoin, the market is not entirely pessimistic. Some institutions remain optimistic about Bitcoin’s future. Digital asset data company CCData, in its newly released “Outlook Report for the Second Half of 2024,” states that Bitcoin has not yet reached the peak of its current appreciation cycle and could still hit new historical highs this year. This view offers investors some consolation but also reminds people to view market fluctuations rationally and to manage risks effectively.
In the face of Bitcoin market’s intense volatility and uncertainty, investors need to stay calm and rational. On one hand, they should closely monitor market dynamics and policy changes, adjusting investment strategies in a timely manner; on the other hand, they should strengthen their risk management awareness, avoiding blind following and excessive speculative behavior. After all, in the realm of digital currencies, filled with opportunities and risks, only a steady approach can ensure a stable and long journey.
This article originates from the Financial World.
