Bitcoin has struggled to regain its upward momentum since its drop from $62,800 about a week ago, fueling speculation of an imminent further decline. However, BitfinexA leading Hong Kong-based cryptocurrency exchange recently predicted in an analysis report that Bitcoin could potentially be heading towards a domestic bottom, suggesting that its recent downtrend could be coming to an end.
Is Bitcoin’s Downtrend Ending?
Cryptocurrency exchange Bitfinex released its latest Bitcoin predictions on Monday. Alpha-112 Report. This prediction is consistent with the recent massive sell-off in BTC, which may have had a negative impact on the cryptocurrency asset, leading to significant declines over the past few days.
According to reports, in an expected and brutal move, Bitcoin It fell below its 120-day range, hitting a low of $53,219 for the first time since February 26. The move is in line with Bitfinex’s prediction of a market correction and increased volatility, but the platform highlights that a potential local bottom is likely looming given the events of July 6 and 7.
In addition, Bitfinex attributed the decline to recent BTC selloffs by German law enforcement agencies such as the Bundeskrimanalamt (BKA). Over the past few weeks, the German government has been Executed a bulk saleTransferred thousands of BTC from their own vaults to exchanges.
According to Bitfinex, this action ultimately triggered fear and uncertainty among investors across all demographics, leading them to sell off their BTC en masse. This caused BTC to drop from its high on Tuesday to its low last Friday at $53,219, a 16% drop from its high to low.
Bitfinex also attributed part of the decline to large BTC transfers. Mt. Gox In preparation for the long-awaited repayment of creditors. Over the weekend, and specifically on July 5, Mt Gox reportedly moved over 47,000 BTC to other wallets, which triggered further selling among investors and could potentially lead to a price drop.
Selling has minimal impact on BTC
Despite these massive sell-offs by the German government, Mt Gox, and retail investors, Bitfinex claims it has had the following impact: Bitcoin It may be minimal and much less than it appears.
Bitfinex emphasized that so far, governments, including the US and Germany, have only taken and sold $9 billion worth of Bitcoin. The realized capitalization of Bitcoin since 2023 is valued at $224 billion, which is just 4% of the value added to the market.
Accordingly, Bitfinex believes that while the sale of seized BTC is significant in terms of individual transactions, the overall impact on the market and BTC stability is not as significant as initially thought.
Featured image from iStock, charts from Tradingview.com