Bitcoin (BTC) has been navigating tumultuous waters recently. The Bitcoin price has plunged. over 20% from its record highs to dip below the critical $59,000 mark. Renowned economist and vocal Bitcoin critic Peter Schiff has spotlighted this decline, emphasizing the more severe drop in Bitcoin’s value when priced against gold.
Peter Schiff Spotlights Bitcoin Vs Gold Performance
According to Schiff, Bitcoin is down over 30% in gold terms, indicating a much harsher bear market in this context. Moreover, Schiff’s warnings come at a crucial juncture for BTC, which is facing multiple headwinds. His recent comments on X (formerly Twitter) highlight a key concern: the impending release of Bitcoin holdings from the now-defunct Mt. Gox exchange.
Mt. Gox, which once handled over 70% of Bitcoin transactions worldwide, shut down in 2014 after a series of devastating hacks and mismanagement. This led to the loss of hundreds of thousands of Bitcoins. Furthermore, after nearly a decade of legal and financial proceedings, the Mt. Gox announced the process of reimbursement.
The defunct exchange will begin reimbursing creditors with Bitcoin and Bitcoin Cash (BCH) on July 2. Many investors fear that the release of a significant amount of BTC could drive price down further. The concern is that creditors, many of whom have waited years to recover their funds, might sell their Bitcoin as soon as they receive it. This could potentially flood the market and push the BTC price lower.
Adding to the bearish sentiment is the significant outflow of investments from digital asset products. According to a CoinShares report, digital asset investment products saw an outflow of $1.2 billion globally. Moreover, Bitcoin accounted for over $630 million of outflows, indicating institutional selling. The selloff was primarily driven by investors in the U.S. and Canada.
In addition, Bitcoin miners have been offloading their holdings to cope with the reduced block rewards following the latest halving event, which cut rewards from 6.25 BTC to 3.125 BTC. In June alone, miners sold 30,000 BTC worth approximately $2 billion. Additionally, the German government’s sale of over $3 billion worth of BTC has added to the market’s downward pressure.
What’s Next For BTC Price?
The Bitcoin price movements have also been influenced by broader macroeconomic factors. Rising interest rates and investor fatigue have contributed to a bearish sentiment in the market. In addition, the critical support level at $60,000 has been breached, raising alarms about a potential drop to $46,600.
In addition, technical analysis further raised concerns with the formation of a double-top pattern around $70,000. It also signals a “death cross” on the daily chart. Both these indicators signal a sustained downtrend. However, despite these negative trends, some analysts see potential for a rebound.
Ali Martinez, a popular crypto analyst on X, pointed out that the TD Sequential indicator has flashed a buy signal on the Bitcoin daily chart. This suggests a possible short-term recovery. Furthermore, be noted that Bitcoin’s Relative Strength Index (RSI) has entered oversold territory, a condition that historically preceded significant price surges.
Martinez’s optimism is echoed by historical patterns where BTC saw substantial gains following oversold RSI conditions. He cited instances from the past two years where Bitcoin surged by 60%, 63%, and 198% after hitting similar RSI levels.
Moreover, if Bitcoin rebounds to $63,700, it could trigger short liquidations worth $57.85 million, potentially driving the price higher. However, on Thursday, June 28, 104,000 BTC options are set to expire with a notional value of $6.72 billion. The max pain point is set at $57,000, suggesting a bearish investor sentiment. Moreover, Federal Reserve’s PCE inflation data on Friday could also accelerate volatility in the market.
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