Bitcoin oversupply may continue to push BTC down, experts say

The cryptocurrency market is likely to experience turmoil in the coming months as several major Bitcoin (BTC) holders—including decentralized exchanges and government entities—may liquidate large portions of their holdings.

This poses concerns about the continued downward pressure on the world's leading digital asset and market liquidity.

Like new Report According to crypto information provider Kaiko, the crypto market is currently struggling with a significant supply crunch. Forced selling and liquidation of charged crypto assets has been a constant theme throughout the summer, with selling pressure at various levels between May and August.

talk with DecryptRob Haddick, general partner of Dragonfly, spent the summer from Mt. Gox distributions are associated with significant BTC price pressure, Japanese yen trade and simply reduce demand. “The market is concerned about congestion with government holdings and additional Mt. Gox distributions,” he said.

One of the main sources of market stress was the Continuous redistribution of money to Mount Gox's lenders. The bankrupt crypto exchange's assets are still worth more than 46,000 BTC, valued at more than $2 billion, which it plans to eventually redistribute.

Darren Franceschini, co-founder of Fidium, explained the potential impact of that distribution. Decrypt According to the forecast, almost all of these Bitcoins, worth more than $2.7 billion, could be sold – adding an additional $8.2 billion in selling pressure if creditors sold their entire holdings.

Other significant owners may contribute to selling pressure in the near future. For example, the US government holds it. Bitcoin worth more than 2 billion dollars.

“While there has been no official announcement of selling these Bitcoins, the possibility of a release could put significant pressure on the market,” Franceschini said.

So have other countries, including the United Kingdom, China and Ukraine. Have a high Bitcoin stock.

On the other hand, the Caico report emphasizes the importance of looking beyond simple trading volumes when assessing market liquidity, such as market depth, which measures the market's ability to absorb large volumes without impacting prices.

The report notes that the importance of volume-to-liquidity ratio and price volatility are indicators of market health and efficiency.

On the first weekend of August Bitcoin has experienced a significant price drop.Trading below $50,000 for the first time since February 2024.

Bartos Lipinski, CEO of crypto trading platform Cube.Exchange, said that given how quickly crypto markets fluctuate, it can be difficult to predict which market participants will be the most active sellers, but an educated guess can be based on a few known factors. .

to Matt Gox Trustees and The exit from Bitcoin ETFs Sources of selling pressure, adding, “If this trend continues, it makes sense for Bitcoin to fight to maintain support at or above $60,000 in the medium-term close to the time.”

Despite these problems, some experts see a market recovery.

“The election itself could be a reason for increased demand from institutional buyers for a friendlier regulatory environment and greater transparency,” Haddique said.

Meanwhile, while Donald Trump has said he won't sell the seized crypto and won't hold it in reserve, Lipinski also mentioned the election, warning that the United States is pushing the balance on the exchange.

“Should authorities begin to crack down on their holdings en masse, the ‘Santa Rally' that many crypto enthusiasts see will fail to materialize for the first time this year in a while.