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Despite reaching a new all-time high (ATH) earlier this year, Bitcoin (BTC) has been experiencing significant difficulties. Recent drops in value, including declines on Wednesday, 3 July and continuing, highlight its struggles. For several weeks, Bitcoin has followed a downward trend, falling well below its record price of $73,738. This Bitcoin decline in 2024 has raised concerns among investors and analysts alike.
As of now, the prospect of a recovery for Bitcoin is increasingly challenging, with the possibility of a return to a Bear Market becoming more likely. The surge in Bitcoin was initially driven by the approval of Spot ETFs in January and the halving event in April, leading many to anticipate a significant rise during these months. However, the current market conditions are shrouded in uncertainty.
Even positive news regarding Ethereum ETFs has not alleviated the market’s ongoing decline, which has persisted for over two days. At the time of writing, Bitcoin stands at $57,905, reflecting an approximately 17.91% loss over the past month.
Currently, there is yet to be a definitive explanation for the decline of Bitcoin and other altcoins. Analysts’ theories appear increasingly inconsistent and unrealistic, changing from day to day without providing a clear and coherent interpretation.
1. Rising Dollar Value: Initially, some attributed the drop to the rising dollar’s value.
2. Mt. Gox Refunds: Speculation arose that the imminent release of BTC for Mt. Gox refunds might impact the market. Analysts predict that creditors, who are expected to receive around 142,000 Bitcoins (equivalent to almost $9 billion at today’s prices), might opt to sell off some of the assets, potentially causing an initial oversupply in the market.
3. Macroeconomic Conditions: The broader macroeconomic situation, a classic reason often cited, was also blamed.
4. Miners’ Financial Struggles: Problems faced by miners, who might be forced to sell BTC to cover expenses, have been suggested as another reason.
Wednesday, 3 July, marked another tough day for the crypto world. Following modest gains, the market turned red again. Bitcoin and Ethereum have lost 4% and 4.5%, respectively, with altcoins faring even worse, though without excessively sharp declines.
The market may have been influenced by Federal Reserve Chairman Jerome Powell’s statements on inflation. He remarked,
“Inflation will not return to 2% this year, but perhaps by the end of next year or in 2026, but we are making progress.”
He added,
“Monetary policy is restrictive and will remain so.”
These statements, although not overly pessimistic, still suggested progress, resulting in mostly green stock markets today.
Meme coins and altcoins are suffering significantly these days, with PENDLE dropping 17% and WIF, PEPE, BON, and FLOKI losing over 10% on average. Other significant losses include TAO (-15%), RNDR (-8.4%), ENS (-16%), and BRETT (-11.7%). This widespread decline is causing considerable concern among investors.
It is difficult to understand why the market sentiment remains so negative, especially with encouraging news on the legislative front.
In the USA, a judge ruled that cryptocurrency sales on secondary markets, such as those operated by exchanges, cannot be considered registered securities sales. This ruling mirrors Judge Torres’s decision in the SEC versus Ripple case.
Moreover, the Spot ETF for Ethereum is expected to be approved soon, although the SEC’s decision has been delayed until July 15. Additionally, two issuers have requested an ETF for Solana, which the SEC must respond to within six months after the presidential elections.
Also, the upcoming US elections could be a significant turning point. A potential victory for Trump, who is currently favored after Biden’s setbacks, could bring a pro-crypto president into office. This might lead to a leadership change at the SEC, with Gary Gensler possibly being replaced. In such a scenario, the market could see substantial shifts, making the situation very interesting.
While it is natural to hope for a recovery, it is also essential to recognize when it is time to step back and secure gains, even if the potential profit could have been much higher. The cryptocurrency market is inherently volatile, and making informed decisions based on factual analysis is crucial for navigating these turbulent times.