Bitcoin failed to hold the $70,000 level broken through on the evening of July 29. At one point, the cryptocurrency’s correction exceeded 6%.
We explain why the cryptocurrency failed to maintain its heights and whether there are risks of further decline in BTC.
What’s Happening With Bitcoin
On the evening of July 29, 2024, Bitcoin managed to break through the $70,000 level for a moment. Afterwards, the cryptocurrency entered a correction, the depth of which exceeded 6%. As of the time of writing, Bitcoin is trading at $66,727.
Ryan Lee, chief analyst at Bitget Research, outlined the incentives for the positive dynamics demonstrated by BTC. Our interlocutor highlighted the speech of presidential candidate Donald Trump at the Bitcoin 2024 crypto conference, expectations of stock market growth and the Fed’s move towards lowering the key interest rate, as well as the growing interest of investors in such high-risk assets as crypto.
Why BTC Failed to Hold Its Height
BTC has lost its gains amid news that the US government has moved $2 billion worth of bitcoins. The coins were confiscated from the darknet marketplace Silk Road. If the US government decides to sell the cryptocurrency, the market will come under pressure, as was the case with the German BTC selloff.
Earlier, Donald Trump promised not to sell the bitcoins that are on the US balance sheet if he wins the election. Information about the movement of BTC, which may be a harbinger of a sell-off in the cryptocurrency, appeared two days after the politician’s statement. Crypto community members noted ironicallythat if the current US presidential administration sells bitcoins, Trump will have nothing to defend.
Let us recall that the American authorities control over 200 thousand BTC. This is almost 1% of the total emission of cryptocurrency. A sell-off of such a volume of BTC could put serious pressure on the market.
Countries with the most bitcoins on their balance sheet. Source: bitcointrasuries
Therefore, the movement of a large volume of BTC by the US authorities provoked panic in the market, which resulted in a fall in the cryptocurrency rate from the local maximum.
Will Bitcoin Resume Growth?
Crypto community members considerthat the news about the US government’s move of BTC could be the final obstacle to the cryptocurrency’s rate moving to a new high.
Founder of the investment fund Capriole Fund Charles Edwards noticed on a number of positive factors that could support the growth of Bitcoin. In particular, he highlighted the upcoming payments to creditors of the collapsed crypto exchange FTX, as well as the likely approach of the phase of reducing the key rate of the Federal Reserve, which will increase the attractiveness of investments in crypto.
Many other crypto industry representatives also do not see serious risks in the news about the movement of US bitcoins. For example, analyst Doctor Profit considersthat BTC will update its absolute maximum in the near future.
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Source: Cryptocurrency
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