Bitcoin Regains $62K As Analysts Say The Worst ‘May Be Behind Us’
Bitcoin's price has risen above $62,000, and analysts say the worst of the sell-off will be the German BTC sales and the Mt. Gox fees may be out of whack, they say.
Bitcoin (BTC) is up 5.2% in the last 24 hours, hitting a two-month low of $53,500 on July 4, and is currently trading at $62,550, according to TradingView data.
Ben Simpson, founder of the crypto education platform Common Shift, told Cointelegraph that he believes that Bitcoin's “local bottom” has just been established and that BTC is now leading an uptrend.
Simpson said Bitcoin's price has been hit by a flood of “forced selling” — much of it coming from negative sentiment from the German government's sale of nearly $3 billion and Gox's $8.5 billion in debt payments.
On July 12, when Bitcoin hovered around the $59,000 level, the Crypto Fear & Gray Index fell to an 18-month low, something Simpson said contradicted his fundamental approach to the broader market environment.
“Overall, I felt there was a huge disconnect between emotion and fundamentals,” he said.
Going forward, Simpson looks to several key catalysts that will be bearish for Bitcoin's price in the coming weeks and months.
“Jerome Powell is hinting that he may be going down at some point soon. We've also got the S&P 500 pulling back into new highs amid all of this, as well as strong Bitcoin ETF earnings.
Over $360 million of leveraged short positions were liquidated as Bitcoin breached the $62,000 mark.
Similarly, eToro market analyst Josh Gilbert told Cointelegraph that Bitcoin's worst could be in the rearview mirror, citing the chances of Trump winning the upcoming election as a key driver of positive price action in the coming months.
“We've seen weakness in the last few months, but I think the worst may be behind us. Any short-term weakness with this in mind is likely to be picked alongside the ETH ETF's tailwind and of course the more supportive US side.
“This week's attacks on former President Trump have had a positive impact on his re-election chances, with the former president's pro-crypto stance taking down Bitcoin and crypto assets in the process,” Gilbert said.
Gilbert also noted that Trump and Republicans are friendlier to crypto than Democrats.
“The closer we get to Trump getting his place in the White House, the more likely we are to see Bitcoin move,” he added.
A Bitcoin pump doesn't happen overnight.
Gustavo Schwenkler, director of Australian crypto exchange Cointree told Cointelegraph, Mt. Gox narrative around lenders throwing their Bitcoin on the market was “made and priced in” from last week.
Schwenkler sees lower-than-expected inflation figures in the US and devaluation sentiment as a strong boost for crypto markets.
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“Inflation came in below expectations and the Fed is expected to begin tapering. The market is expecting the first rate cuts as early as September.”
Still, Schwenkler cautioned that any upward shift in Bitcoin's price may not happen overnight.
“Also, I don't think there will be much pressure for prices to go up much in the short term. I think we will see BTC move around at least $55-65k until the Fed lowers the price.
Mark Hiriart, head of sales at crypto asset manager Zerocap, argues that even if Bitcoin breaks $62,000, the $60,000 resistance needs to be turned into support, meaning the price should stay above the $60,000 mark for some time.
Additionally, he said that before BTC could rise to $65,000 and beyond, Bitcoin must retrace its key 50-day and 100-day simple moving averages.
Meanwhile, Hiriart still Mt. Gox has warned that there may be some potential negative consequences for Bitcoin payments.
“It's naïve to think that Matthew Gox's creditors aren't going to make a profit sitting on ten years of profits,” he said.
“The question is how panicked the spreads are and how much receivers want to cash out. I doubt the short-term pressure on the market will continue into the summer months,” Hiraert added.
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