Bitcoin may have potentially hit a local bottom after experiencing a significant sell-off in June, according to analysts from Bitfinex exchange. On July 3, the price of Bitcoin dropped below the 120-day range, reaching a low of $53,219. This drop was attributed to concerns surrounding the start of Mt. Gox’s creditor repayments and other issues. Despite this, Bitfinex analysts believe that Bitcoin may have reached a local bottom based on market data over the weekend. However, Mt. Gox still needs to distribute 94,457 BTC to creditors, which accounts for about 67% of the total BTC collected for repayments. Bitfinex also noted that the decline in Bitcoin’s price was partially due to the German law enforcement agency, Bundeskriminalamt (BKA), selling Bitcoin on exchanges and triggering high-volume selling from various investors. Bitfinex has identified several reasons why Bitcoin’s decline may soon come to an end. One reason is that the amount of BTC transferred to exchanges by the German government, although significant in nominal value, is relatively small compared to the total BTC bought and sold since 2023. The realized capitalization of Bitcoin flowing into the market since 2023 amounts to $224 billion, while only $9 billion has been seized and sold by governments like the United States and Germany. This amounts to only 4% of the total cumulative realized value since 2023. Bitfinex analysts believe that this suggests that the impact on the market and the supply overhang from government-seized Bitcoins are minimal. Another factor indicating a potential bounce in Bitcoin’s price is the drop in the spent output profit ratio (SOPR) and negative funding rates. SOPR measures the realized profit or loss on a given day for wallets held by specific groups of investors. Bitfinex’s research shows that the SOPR for short-term holders reached 0.97 on July 6, indicating that short-term investors are not selling at a loss. Additionally, the average funding rate across all BTC perpetual trading pairs has turned negative for the first time since the bottom on May 1. Bitfinex believes that historically, periods of negative funding rates and low short-term SOPR values have often marked the bottom of price corrections.