The cryptocurrency market has been experiencing a significant downturn in recent days, especially with Bitcoin facing intense bearish pressure. On July 4, the price of Bitcoin dropped below $60,000, reaching as low as $57,000. The following day, BTC continued its downward spiral, falling below $54,000 at one point. Various factors have been attributed to this disappointing price movement, including government selloffs and potential selling after news of the Mt. Gox payout.
One of the key drivers of the current downward pressure on Bitcoin has been the reports of governments offloading seized BTC assets. The German government, in particular, has been involved in transactions involving substantial amounts of Bitcoin in recent weeks. However, CryptoQuant CEO Ki Young Ju believes that the impact of government selling seized BTC assets is being overestimated. According to CryptoQuant data, only around 5% of the total capital that has flowed into the market since 2023 is from government-seized BTC, amounting to $9 billion out of $224 billion.
Young Ju explained that the realized cap, which represents the total capital that has entered the market since 2023, differs from the traditional market cap as it is based on the price of each coin when it was last moved. He expressed confidence in the long-term potential of Bitcoin, stating that the current bull cycle is not yet over and is expected to continue until early next year. The CEO also predicted that Bitcoin could reach its peak in this cycle around the $112,000 price level.
Despite the recent price drop, Bitcoin managed to recover above $56,000 on July 5 and is currently trading at $56,400. However, the cryptocurrency is still down by nearly 6% over the past seven days. The daily chart shows the BTC price at $56,401, indicating some volatility in the market.
In conclusion, while the cryptocurrency market, particularly Bitcoin, has been facing bearish pressure in recent days due to various factors such as government selloffs and potential Mt. Gox payouts, experts like CryptoQuant CEO Ki Young Ju remain optimistic about the long-term prospects of Bitcoin. With the realization that government selling of seized BTC assets may not have as significant an impact as initially thought, there is hope that Bitcoin’s bull cycle will continue and potentially reach new highs in the coming months.
