Bitcoin price has recovered above the $62,000 mark, and analysts say the worst of the sell-off may be over with German BTC sales ending and Mt. Gox payments nearly priced in.
Bitcoin (BTC) has gained 5.2% over the past 24 hours, rebounding from two-month lows of $53,500 on July 4, and is currently trading hands at $62,550, according to data from TradingView.
Ben Simpson, the founder of crypto education platform Collective Shift, told Cointelegraph that he believes Bitcoin’s “local bottom” has now formed and that he believes BTC is now heading into an uptrend.
Simpson said Bitcoin’s price had been hammered by a deluge of “forced selling” — much of it stemming from nearly $3 billion in sales by the German government and negative sentiment toward some $8.5 billion in repayments from Mt. Gox creditors.
On July 12, as Bitcoin hovered around the $59,000 level, the Crypto Fear & Greed Index fell to its lowest level in 18 months, which Simpson said is at odds with a more fundamental approach to the broader market environment.
“Overall, I just felt like there was a huge disconnect between sentiment and fundamentals,” he said.
Looking ahead, Simpson expects several key catalysts to be bullish for Bitcoin’s price in the coming weeks and months.
“Jerome Powell is hinting that interest rates could be cut at some point. We’re also seeing the S&P 500 soar to new highs, as well as a return of capital flows into Bitcoin ETFs.”
Just over $360 million in leveraged short Bitcoin positions were liquidated as Bitcoin crossed the $62,000 mark, according to Coinglass data cited by Apollo sats founder Thomas Fahrer in a July 15 article on X.
Similarly, eToro market analyst Josh Gilbert told Cointelegraph that the worst of Bitcoin’s price may be behind us, citing Trump’s increased chances of winning the upcoming election as a key driver of positive price action in the months ahead.
“We have seen some weakness over the last few months, but I think the worst is likely behind us. Any near-term weakness is likely to be bought with that in mind, alongside the tailwind of an ETH ETF and, of course, the potential election of a more pro-crypto US party.”
“The attack on former President Trump this week had a positive impact on his re-election chances, with the former president’s pro-crypto stance sending Bitcoin and crypto assets higher in the process,” Gilbert said.
Gilbert also noted that Trump and Republicans have a friendlier stance on crypto than Democrats.
“The closer we get to the possibility of Trump returning to the White House, the more likely we are to see Bitcoin move higher,” he added.
A Bitcoin price increase won’t happen overnight
Gustavo Schwenkler, head of Australian crypto exchange Cointree, told Cointelegraph that the narrative around Mt. Gox creditors dumping their Bitcoin on the market had already been “addressed and addressed” last week.
Schwenkler sees lower-than-expected US inflation numbers and the suggestion of lower rates as strong catalysts for the future of cryptocurrency markets.
Related: Bitcoin whales scoop up $4.3 billion worth of BTC as price plummets
“Inflation has been weaker than expected and expectations of a Fed rate cut have been reinforced. The market now expects a first rate cut as early as September,” he said.
Still, Schwenkler warned that a potential Bitcoin price surge likely wouldn’t happen overnight.
“I also don’t think there will be much pressure for the price to go much higher in the short term. I think we’ll see BTC hover around $55,000-$65,000 at least until the Fed actually cuts rates.”
Mark Hiriart, head of sales at crypto asset manager Zerocap, says that even if Bitcoin breaks above $62,000, it should turn the $60,000 resistance into support, meaning the price should hold above the $60,000 mark for some time.
Additionally, he said that Bitcoin would need to reclaim its key 50-day and 100-day simple moving averages before BTC could advance to $65,000 and beyond.
Meanwhile, Hiriart warned that there could still be negative effects related to potential Mt. Gox Bitcoin refunds.
“With Mt. Gox’s creditors sitting on a 10-year profit, it would be naive to think there won’t be some profit-taking,” he said.
“The question is how staggered the distributions are and what percentage of beneficiaries want to take advantage of them. I suspect the short-term pressure on the market will continue into the summer months,” Hirairt added.
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News Source : cointelegraph.com
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