- Bitcoin’s price drop is fuelled by ETF liquidations, Mt. Gox repayments, and an overbought market.
- New market entrants are selling the dip, influenced by recent ETF approvals.
- High-profile endorsements haven’t counteracted heavy selling by major players, pressuring prices.
Amid the price of Bitcoin falling below US$55K (AU$81.65K), the first time since February, everyone is wondering if a reversal is next. According to some analysts, the answer to that question is: maybe not.
Going by Markus Thielen from 10x Research the floodgates may have opened, sending the price of BTC much lower – to US$50K (AU$74.2K) potentially.
Related: Justin Sun’s Rescue Bid: Sparked by German Government’s Bitcoin Sale
The theory is based on ETF liquidations, Mt. Gox repayments and an overall overbought market.
Our data from early June already hinted at an overbought market ripe for correction.
Markus Thielen 10x said that through past analysis they had given investors plenty of warnings that Bitcoin price levels are not sustainable, adding that only “ill-informed traders are willing to buy here”.
Unfortunately, many appear to be still very long Bitcoin, while a correction towards $50,000/$55,000 could have offered much better re-entry levels.
10x Research Data Shows Newcomers Selling the Dip
According to that thesis, buying the dip here would be premature, at least if you believe 10x. Data from CryptoQuant seems to back up that theory at least somewhat. On-chain data points to new market entrants – particularly those coming in post-January ETF approvals – who have sold the dip.
Approximately $2.4 billion worth of Bitcoin aged between 3 and 6 months moved on the network during the drop.
CryptoQuant Interestingly, market intelligence platform Santiment said that retail investors are scooping up BTC amid increased “buy the dip” mentions on social media. According to their analysis it’s better to let the noise die down a little before getting back into the market.
“Nothing’s Broken Other Than Morale And Sentiment”
Founder of Capriole fund, Charles Edwards explains the dip and lack of “mooning” by pointing toward noise in the market caused by ETFs and figures like Michael Saylor and Michael Dell.
Related: Bitcoin Dips Below $57K as German MP Calls for Halt in BTC Sales by Government
He said that despite high-profile endorsements and developments in the Bitcoin sector, the price hasn’t surged significantly. This is because key players have sold or transferred around US$24 billion (AU$35.65 billion) worth of Bitcoin in 2024 – increasing market supply and putting downward pressure on prices.
Be that as it may, other analysts urge calm, saying nothing has fundamentally changed, with the quote of the day coming from IncomeSharks:
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