As per analysts at 10x Research, Bitcoin is projected to drop below $57,000 after surpassing $60,000 on July 4. They indicate that this steep decline might just be the beginning, with the potential to further plummet to $50,000.
The shift from the psychological threshold of $60,000 towards $50,000 signifies a significant change in market sentiment, attributed by 10x Research to a reduction in buy flows and an uptick in sell flows. Markus Thielen, an analyst at 10x Research, noted that the downward trend was foreseeable, remarking on the sudden 5.44% decrease in Bitcoin’s price, which has had a notable impact on investor sentiment and market liquidity. This is evident in Bitcoin’s $1.1 billion market capitalization and a 57% surge in trading volume.
By breaching the crucial level for Bitcoin miners and spot Bitcoin ETF buyers, as outlined in the 10x Research report, the decline in price could accelerate as support levels are breached and sellers rush to secure liquidity. The recent sell-off aligns with the projected Mt. Gox repayments amounting to $8.5 billion in BTC, scheduled to commence in July.
According to the 10x Research report, with the $60,000 support broken, only uninformed traders would consider buying at this point. The report also portrays an analysis chart from 10x Research illustrating a “Double Top Formation” in the Bitcoin price since December 2023.
Maintaining a cautious stance on BTC price, the 10x Research report advises traders to emphasize risk management to navigate through the anticipated volatility effectively. Additionally, a recent analysis from IT Tech attributes the downward trajectory to long-term holders capitalizing on substantial profits. On July 3, the spent output profit ratio (SOPR) from long-term holders surpassed a value of 10, indicating that BTC was sold for at least 10 times the initial purchase price. Long-term BTC holders, who typically retain their assets for around five to seven years, are seen as contributing to the selling pressure in the market.
In conclusion, as Bitcoin faces fluctuations and market dynamics, strategies like risk management and monitoring long-term holder behavior become crucial considerations for traders in managing their positions effectively.