CoinNet reports:
According to the founder of a crypto hedge fund, a drop in BTC to $52,000 or $45,000 is considered normal. Despite the decline, top-cycle indicators suggest there is more room for growth.
Bitcoin fell 13% on the weekly chart, trading below $55 million. This week’s sell-off erased much of the significant gains seen in the first quarter post the approval of the U.S. spot BTC ETF.
The steep drop has raised market concerns, with some hinting that the bull market may have ended.
However, Charles Edwards, founder of crypto hedge fund Capriole Investments, claimed that the sell-off is “normal.”
“A 30-40% pullback to $52,000 or $45,000 would be normal in a bull market.”
BTC has dropped nearly $20,000 from its peak of $73,700 in March to a recent low of $53,400, marking a decrease of approximately 26%.
Further decline to consolidation zone (marked in blue) in February would translate to a 30% pullback.
In the stock market, a 5-10% drop can be considered a pullback. Anything above this level confirms a downward trend.
Yet, according to Edwards, BTC might not conform to this. Hence, the psychological level of $50,000 may be a key target of interest.
Bitcoin plummeting to $50,000: Is the bull market over?
Interestingly, market observers attribute the negative sentiment in the market to the Mt. Gox and German Bitcoin sell-offs.
Some welcome the sell-off, seeing it as a beneficial way to clear unresolved supply overhangs for Q3 2024.
“By the end of Q3/Q4, due to seasonal, election-related, and liquidity factors potentially aligning in favor of cryptocurrencies, the market may no longer face the major supply overhang that has persisted for years.”
However, the release of Mt. Gox’s holdings may be delayed. Latest updates on July 5 indicate other creditors may wait longer for repayment.
The now-defunct Japanese exchange holds 1.416 million BTC, valued at approximately $7.6 billion at current prices. On July 5, it moved $2.7 billion and transferred $148 million worth of Bitcoin to BitBank.
Would a delay in Mt. Gox’s repayment to other creditors provide relief to the market? This remains to be seen.
Meanwhile, despite the prevailing negative sentiment, BTC still has some growth potential. Historical price chart data indicates that the market top may occur by late 2025.
Furthermore, a range of critical BTC top-cycle indicators, including MVRV (Market Value to Realized Value) and the Puell Multiple that measures miner profitability, have not reached extreme levels. Thus, suggesting BTC has more upside potential.
