Bitcoin
Bitcoin at US$61,000 – All the reasons why the market is ‘cooling off’
- Bitcoin price hovers around $61K as market cooldown and summer slowdown hits
- Mt. Gox unlocks and government sales also raise some supply concerns
The cryptocurrency market hasn’t been having the best of times lately. This was also the case at the time of publication, with the industry’s total market capitalization falling to $2.26 trillion at the time of publication. As expected, Bitcointhe world’s largest cryptocurrency led the way, with BTC falling nearly 1% on the charts.
Bitcoin and the market’s top altcoins weren’t the only ones affected.
The memecoin market, for example, also saw a slowdownwith its market capitalization falling by 1.33% to $47.89 billion. In fact, trading volume dropped significantly by 19.31% as well.
Now, several factors contributed to this market-wide decline, both market-specific events and broader economic influences. So it’s worth examining these factors.
Market cools after positive ETH ETF news
The positive news about the potential trade of Ether ETFs (ETH) led to a cooling period in the cryptocurrency market. The United States Securities and Exchange Commission is reportedly close to approving ETFs tied to the spot price of Ether, with approval expected as early as July 4.
While this anticipation initially boosted market optimism, subsequent market adjustments contributed to the ongoing recession.
Additionally, seasonal trends and reduced trading activity during the summer months are also affecting the market. Historically, June has seen mixed performances for Bitcoin, with an average return of -0.56%. Simply put, it has been one of the weakest months for the cryptocurrency.
The same was recently highlighted by popular market analyst Dan Crypto Trades.
Source: X
It can therefore be argued that the drop in trading volumes during the summer holiday period is leading to less market activity and greater volatility.
Concerns over Mt. Gox and the government selloff
The market is also facing concerns about the potential impact of unlocking Mt. Gox and sales activities by government agencies. In fact, the same was highlighted by the latest QCP report weekend summary about the state of the cryptocurrency market.
Now, some believe these supply concerns may be overblown. Even so, the potential influx of Bitcoin from these sources is causing uncertainty and contributing to bearish sentiment.
Support levels and future projections
Despite these bearish headlines, however, Bitcoin’s support level around $60,000 has shown resilience. If this support level weakens, we could see the crypto decline further. By doing so, BTC could test lower levels around $50,000.
In fact, QCP analysts went on to say:
“We could test lower levels towards 50k, but the market will find strong support there as TradFi interest continues to permeate due to general regulatory easing across the globe.”
That said, the early launch of spot ETFs for other major cryptocurrencies like Solana (SOL) could spark renewed interest and provide some support to the market.
In light of prevailing market conditions, analysts recommend strategies to navigate the crisis. For Bitcoin, it has been suggested to generate yield in a sideways market, with the potential to make directional bets in Q4.
For Ether, taking a short-term bullish position before the ETF launch could be advantageous.