Bitcoin Price Breaks 200-Day Support: Mt. Gox Whales, Germany and US Govt Dump BTC

Bitcoin Price Analysis

Bitcoin price fell below the $56,719 on July 4, its lowest in the last 127 days dating back to Feb 28, 2024. the recent selling activity among whales and the USA and Germany government authorities stand out as the main bearish catalysts this week.

Bitcoin Price Falls below 200-Day Moving Average

The global crypto market made promising start to the week, with Bitcoin price breaking above $63,750 on Monday July 1. However, the bulls have failed to sustain the upward trajectory.

On Thursday, July 4, Bitcoin price has succumbed to a major downswing, amid widespread sell-offs for institutional investors and designated government holdings.

The chart above shows Bitcoin flashed 3 major bearish signals as it dipped to a daily timeframe bottom of $56,719 on Thursday. Firstly, $56,719 BTC’s lowest price levels in 127 days, dating back to Feb 28. It also shows that Bitcoin has now decline by more than 10% from its weekly timeframe peak recorded on Monday.

But more importantly, the chart depicts that BTC is now trading below the critical 200-day Simple Moving Average (SMA) price level. When the price of an asset breaks down below a long-term Moving Average price support, it effectively puts bears in control of teh short-term market momentum.

With expectations of a US Fed rate cut looking unlikely, after the Fed Chief Jerome Powell’s recent statements, the bearish sentiment surrounding Bitcoin and the crypto markets could grow in the days ahead.

Rachael Lucas, a crypto analyst at Australia’s BTC Markets exchange, noted the significance of falling below the $60,000 resistance line as it represents a psychological barrier for many investors, suggesting that if Bitcoin remains below this level, it could lead to increased short-term volatility.

Whale Investors, USA, Germany Govts Dumping BTC

The cryptocurrency’s recent volatility has been attributed to payouts to creditors of the defunct cryptocurrency exchange Mt. Gox, as well as major sell-offs staged by the governments of USA and Germany.

Creditors are expected to receive around 142,000 BTC, worth about $9 billion, starting in July. While the Mt Gox payout is worth less than 1% of the Bitcoin’s total market cap, the expected selling pressure has triggered significant fear, uncertainty and doubt (FUD) among other strategic investors.

The chart above shows how each tranche of the sell-offs had impacted BTC price trends over the past week.

With 142,000 BTC held unmoved for over 14-years now back in circulation, many strategic short-term traders are now looking to exit or cutdown on their Long BTC positions avoid the potential impacts of the sudden surge in Bitcoin market supply across exchange.

Furthermore, the German government has resumed selling its substantial Bitcoin holdings, initially seized from the operators of a movie piracy website. This sell-off, amounting to over $3 billion, has also contributed to the market’s instability​.

Bitcoin Price Forecast: BTC Poised to Hold $55k Support

Bitcoin has experienced a significant decline, dropping below $58,000 and currently trading at $57,967. This drop represents an 11.49% decrease over three days, highlighting a period of intense selling pressure.

The price action shows that Bitcoin has fallen below the $60,000 psychological barrier, which has previously acted as a strong support level.

This breakdown has led to increased market volatility, with the cryptocurrency touching lows of $56,719. However, analysts believe that the $55,000 support level could act as a strong foundation, preventing further declines.

Looking ahead, the 200-day moving average at $58,481 serves as a critical resistance, and bulls must close consecutive trading day above this level to stand a chance and early price trend reversal.

Investors will need to watch for potential market reactions to significant external factors, including economic policies such as the US Non-Farm Payrolls data scheduled to be released on Friday July 5.