Bitcoin (BTC) News Today: Can a China Crypto Re-Entry Counteract Supply Surge?

Is bitcoin (BTC) facing another crash, or is this a golden opportunity?

Recent market movements suggest that bitcoin and the crypto markets are under significant pressure due to external factors like Mt. Gox repayments and potential government BTC sell-offs. As investors brace for impact, could a China re-entry into the crypto market shift the balance?

Bitcoin Sinks the Broader Crypto Market as Supply Pressures Mount

On Sunday, July 7, BTC slid by 4.12%. Reversing a 2.76% gain from Saturday, July 6, BTC ended the week down 10.89% to $55,910.

Investors jumped the proverbial crypto ship in droves over fears of Mt. Gox BTC payments to creditors fueling a supply surge to undo the effects of the Bitcoin Halving event.

Impact of Mt. Gox Repayments on Bitcoin

Mt. Gox plans to return over 141,000 BTC, equivalent to over $8.5 billion, to its creditors. Furthermore, the crypto market expects creditors to sell their BTC for substantial profits. Mt. Gox collapsed in February 2014, with BTC closing the month below $5600, almost 10% of its current value ten years later.

However, the German and US governments also have sizeable BTC stashes.

External Influences on BTC: Government BTC Holdings: A Market Threat?

Recently, the German government sent BTC to exchanges for sale, fueling speculation about plans for a larger sale. The US government seizure of BTC from the Silk Road case will also expose BTC and the crypto market to large BTC sales.

Recently, Arkham Intelligence shared a dashboard showcasing BTC holdings, graphical representations of historical balances, and the most recent transactions for the largest governments holding BTC. The US government reportedly had 213,297 BTC, far higher than the approximately 141,000 Mt. Gox is returning to creditors.

Can the Chinese government rebalance the supply-demand imbalance?

Potential Market Shifts: Is Beijing Eyeing Bitcoin as an Alternative to Gold?

In June, FX Empire Senior Editorial Team Member and Author James Hyerczyk discussed the possibility of China re-entering the crypto market.

The People’s Bank of China (PBoC) reportedly ended gold purchases in May, fueling speculation about a shift into BTC and the crypto market.

James also highlighted the increasing appeal of BTC as a hedge against the weakening US dollar.

A Beijing re-entry into crypto could counter the supply issues impacting crypto price trends.

Supply-Demand Dynamics: Supply Pressures and Investor Sentiment

Would the US stop offloading BTC if China was on the other side of the transaction?

In summary, concerns about oversupply continue to impact buyer demand for BTC. Sizeable government holdings of BTC leave BTC and the broader crypto market at risk of another sell-off. However, China could rebalance the scales if it re-enters the crypto market.

Considering the supply-side risks, Investors must remain vigilant. Monitor real-time data and expert commentary to adjust your trading strategies accordingly. Stay informed with our latest updates and insights to navigate the crypto market.

Technical Analysis

Bitcoin Analysis

BTC remained well below the 50-day and 200-day EMAs, affirming the bearish price signals.

A BTC move above the 200-day EMA could give the bulls a run at the $60,365 resistance level. BTC could target the 50-day EMA in case of a breakout from the $60,365 resistance level.

US BTC-spot ETF market flow trends and supply-demand imbalances need consideration.

On the other hand, a break below the $52,884 support level could signal a fall to the $50,000 handle.

With a 27.72 14-Daily RSI reading, BTC is sitting in oversold territory. Buying pressure could intensify at the July 5 low of $53,591.

Ethereum Analysis

ETH sat well below the 50-day and 200-day EMAs, confirming the bullish price trends.

A break above the $3,033 resistance level and the 200-day EMA could support a move toward the $3,244 resistance level.

US ETH-spot ETF-related chatter also needs consideration.

Conversely, an ETH drop below the $2,664 support level could give the bears a run at $2,500.

The 14-period Daily RSI reading, 25.80, shows ETH sitting in oversold territory. Buying pressure could intensify at $2,800.