The ongoing repayments to Mt. Gox creditors are exacerbating the current wave of crypto pessimism, driven by increased selling pressure from Bitcoin (BTC) miners and whales. According to on-chain data from Glassnode, over 21,000 Bitcoins, valued at more than $1.2 billion, were transferred to cryptocurrency exchanges last week.
On-chain data reveals that several Bitcoin and Ethereum (ETH) whales, who had collateralized loans on various decentralized applications (Dapps), were liquidated in the past 24 hours. This has significantly impacted market stability, contributing to a surge in selling pressure.
In the past 24 hours, over $636 million has been liquidated from crypto derivatives trading, predominantly affecting long traders. This mass liquidation has intensified market volatility, reflecting the broader sentiment of fear among investors.
As Coinpedia reported, the fear and greed index has plunged from 44 (neutral) to 29 (fear) within the last 24 hours. This sharp decline highlights growing investor anxiety and uncertainty in the market.
What Next for Bitcoin?
With Mt. Gox set to continue its crypto distribution over the next three months and ongoing Bitcoin sales from the German and U.S. governments, the market is facing a major capitulation reminiscent of the FTX collapse.
From a technical perspective, if Bitcoin fails to hold the $56,000 support level, it could find solid support around $52,500 in the near term. This potential drop underscores the fragile state of the market.
Bull Cycle Outlook: Lessons from the Past
Despite the current downturn, the possibility of a cycle top for the 2024 crypto bull run cannot be entirely dismissed. Historical patterns from previous major bull cycles suggest that the rally is far from over.
Some analysts argue that the 2024 cycle mirrors the 2017 cycle, which saw several 25-30 percent pullbacks before peaking at around $20,000.
Matrixport maintains that the crypto bull cycle will eventually gain momentum, particularly as the U.S. general election approaches and anticipated interest rate cuts come into play. Additionally, the crypto market is expected to follow major stock indexes, such as the S&P 500, which have recently reached new all-time highs.
The crypto market is a wild ride! Are you buying the dip or selling the news? Weigh in with your strategy.
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