Bitcoin
Bitcoin Recovers to $58K After Midweek Plunge: Is the Worst Over?
Bitcoin Bitcoin suffered a dramatic drop after hovering around the $60,000 mark earlier this week. The cryptocurrency broke through its support level on Wednesday evening, coinciding with the July 4 holiday in the US, which led to a rapid decline. By Thursday morning, Bitcoin had fallen to as low as $56,750 but managed a modest recovery. Despite a final dip below $56,900 around mid-morning, Bitcoin Price recovered 5% throughout the afternoon.
At the last update, BTC was trading at $58,158.80, reflecting a loss of 3.30% in the last 24 hours.
Government Concerns and Market Reactions
This recovery eased concerns about potential selling pressure from the German government and Mt. Gox’s early Bitcoin selloff. Market liquidations totaled $100 million, a relatively small amount compared to the $600 million liquidated last week when Bitcoin plunged to near $54,000, its lowest point since February.
About that, Bitcoin ETFs have been remarkably active, with $438 million invested recently, bringing their total asset value to $49.3 billion. Trading volumes for U.S. Bitcoin ETFs on July 5 and 8 were $2.18 billion and $1.98 billion, respectively, marking the highest levels since June 25.
Germany and Mt. Gox: Overblown Fears?
Despite initial concerns about continued selling pressure from Germany and Mt. Gox, many experts consider these fears to be overblown. On Monday, the German government transferred $900 million worth of Bitcoin, followed by another $362 million to Kraken and other trading desks on Tuesday.
Ryan McMillin, chief investment officer at Merkle Tree Capital, commented that the worst of Germany’s sell-off appears to be behind it. According to Arkham Intelligence, Germany has moved about two-thirds of its seized Bitcoin assets, leaving approximately $1.6 billion remaining.
Future perspective
While the transfer of funds to exchanges and market makers indicates a likely intention to liquidate, it does not confirm that Germany’s assets have already been sold. Furthermore, the bankruptcy estate of the now-defunct cryptocurrency exchange FTX is expected to distribute approximately $16 billion in cash to crypto investors around September or October of this year. McMillin noted that this cash distribution should act as a “significant bullish catalyst” for the market in the coming months.
Read too: Bitcoin Rate Drops to 4-Year Low: What This Means for Miners and Investors
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