- The news of redemptions in Bitcoin and Bitcoin Cash will likely put additional downward pressure on the two assets.
- The statistics and futures data showed that there are likely to be more losses in the coming week.
Bitcoin [BTC] found itself in a tough position after continued selling pressure forced prices from $71.9k on June 6 to $61.4k at the time of writing. The $60.5k level was reached just a few hours earlier following news from the Bitcoin exchange Mt. Gox.
The now-defunct exchange saw a massive hack in 2014 that resulted in a loss of approximately 740,000 BTC, worth $15 billion at current market prices.
It was once the best fair in the world, but a lot has changed since then. The repayments of the assets stolen from customers faced years of delayed deadlines, but eventually an announcement On June 24, Monday, it was announced that refunds would begin in July 2024.
Rehabilitation Trustee Nobuaki Kobayashi stated that the Rehabilitation Plan will make refunds in Bitcoin and Bitcoin Cash [BCH]which could increase market selling pressure on these assets.
Research into the impact of this news
In late May, an AMBCrypto report highlighted that the exchange moved 140,000 BTC, worth $9.4 billion at the time. The movement did not immediately impact prices, but a week later BTC formed a local top just below the $72,000 mark.
It is possible that the wave of selling pressure in the following weeks anticipated these types of developments. If a significant portion of that amount hits the market, it could compound Bitcoin’s problems and increase selling pressure.
From May 8 to 14, 2024, BTC bulls fought valiantly to defend the $60,000 support zone and managed to push prices up to $71.9,000 on May 21.
Therefore, a retest of the $60.2k-$61.5k region is likely to see a positive response.
Numbers indicate that the correction may be coming to an end
Crypto analyst Axel Adler Posted on X (formerly Twitter) and drew attention to the short-term holders’ issued output profit ratio (SOPR) metric.
The 90-day moving average (90DMA) was just above 1 at the time of writing. Compared to the 2016 cycle, it is possible that Bitcoin could continue its correction until this measure falls below 1.
After that, the possibility of a trend reversal in favor of the bulls would become more likely, he noted. This process may take some time, and traders and investors may see more losses or consolidation for BTC in the coming weeks.
Another analyst, Ali Martineznoted that the daily RSI was again in the oversold area, below the 30 value. The three previous times this happened, we saw Bitcoin price recoveries of 60%, 63% and 198%.
While this sounds reassuring, it does not mean the downtrend has ended, nor does it guarantee an uptrend.
A violent move south that could potentially push below $60,000 in search of liquidity before consolidation or recovery is expected in the coming weeks.
BTC futures market data shows that bulls were going through a lot of pain
Data from Coinalyze showed that spot CVD has steadily decreased over the past month. This was a sign of selling pressure in the spot market and underlined Bitcoin’s weakness.
Open Interest rose in early June, but also started to fall after the first week.
Taken together, this indicated bearish sentiment over the past three weeks. Futures traders were unwilling to bet on a BTC recovery and spot traders continued to sell their assets.
Moreover, sudden spikes of prolonged liquidations pushed prices deeper and increased pressure on the bulls.
The past 24 hours also saw a wave of long liquidations, with nearly $75 million in long liquidations in a 12-hour period on June 24, based on Coinalyze data.
The long/short account ratio at the time of writing was 2.46. This meant that there were 2.46 times like that many bills maintaining long positions because short positions existed.
In other words, smaller retailers were betting on a Bitcoin bounce, but the larger accounts continued to fall short.
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When we added it all up, it seemed very likely that the Bitcoin bulls would continue to dance to the sellers’ tune over the next two to four weeks.
A sudden price drop is also possible given the daily RSI plunge into oversold territory.