Market picture
The crypto market cap has fallen back below $2 trillion, accelerating its decline and losing over 8%, while many altcoins have suffered double-digit losses within the last 24 hours.
Bitcoin pulled back to $54.7K, losing around 6.5% since the start of the day and hitting a low of $53.3K. The 200-day moving average failed to act as support, and we saw an acceleration in the sell-off after a break below this line. The current failure is an acceleration of the downtrend that has been in place since March. The fundamental pressure appears to be accelerating selling by miners and long-term “holders” such as the German and US governments, in addition to payments to Mt. Gox creditors.
On Friday morning, Ethereum rewrote February’s lows and briefly dipped to $2800. By the start of the active European trading day, the price had returned to the April and May lows, but it’s hard to see signs of active buying yet. So far, the situation looks like a pause before a new downward impulse that could take the price back to $2300.
News background
Bloomberg recalled the Mt. Gox trustee’s gradual refund of 137,000 BTC to customers of the bankrupt platform and traders’ concerns that some of the coins would end up on the open market.
Also causing nervousness is the distribution of digital gold by the US and German authorities. On Thursday, German authorities sent 1,300 BTC to Coinbase, Kraken and Bitstamp. On the same day, 237 BTC worth $13.67 million were transferred from a US government-linked address.
In addition, the US election factor may be putting pressure on the price. “The likelihood of Biden being replaced by a stronger Democratic candidate, who may not be supportive of cryptocurrencies, is one of the factors behind the decline,” said Digital Asset Capital.
10x Research has allowed bitcoin to fall towards $50,000 due to the sudden change in sentiment. On the BTC chart, a technical reversal figure, the double top, is being realized, suggesting a drop in prices to the $45K—$50K area. Miners, ETF buyers, and hodlers are leading the selling.
CryptoQuant noted that Bitcoin miners have started shutting down inefficient equipment and selling off reserves, which are clear signs of capitulation. Historically, such periods are associated with price lows.
Whale Alert noted that the 119 BTC that had been “dormant” for more than 12 years had been moved.
