Bitcoin revisits 58,000, the market has reached a critical point between bull and bear
Is it time to buy the dip again?Author: Wei Zhi, Luccy, BlockBeats
In the past 24 hours, the total market capitalization of the cryptocurrency market has dropped by $91 billion.
After more than 12 hours of long and short battles around the $60,000 mark, Bitcoin began to "cascade" at 9 AM today, briefly falling below $58,000, once again testing the low from a week ago, with a 24-hour decline of 5.72%. As of the time of writing, Bitcoin has returned above $59,100.
In addition to Bitcoin, mainstream altcoins have also started to decline. The cryptocurrency market saw nearly $100 million in liquidations within one hour, accounting for half of the total in the past 12 hours. Mainstream tokens in the Ethereum ecosystem, such as LDO, ETHFI, and ENS, have seen declines ranging from 8% to 20.46% in the past 24 hours. The Solana ecosystem has not been spared either, with JTO, WIF, and TNSR all experiencing declines of around 15%.
Already at the bottom, but there are always reasons for the decline
Although the market has been sluggish for a month, the crypto community has accepted that we are currently in a "long correction bottom" phase. Bitcoin's volatility has approached a new low since February, but signals of continued decline still exist.
David Lawant, head of research at FalconX, wrote in a report: "The current dynamics of the cryptocurrency market are characterized by low volatility and weak trading volume. When prices begin to move toward the edge of the range, the order book becomes unbalanced."
The Bitcoin spot ETF is an important reference for judging market direction. According to data from Farside Investors, Bitcoin ETFs have seen net outflows for two consecutive days, with a total outflow of $34.2 million over those two days.
Moreover, the lack of new funds entering the market is also a significant reason why the market is struggling to meet expectations.
The total market capitalization of stablecoins in the cryptocurrency market has been steadily increasing since mid-last year, corresponding to a continuous rise in the overall market at that time, with clear signals of a bear-to-bull transition. However, since early May, there has been no new money entering the cryptocurrency market, and the market capitalization of stablecoins has been hovering around $160 billion for more than two months. In the absence of liquidity in the market, there is no buying power to drive prices up.
Continued low sentiment, is it time to buy?
A week ago, Bitcoin touched $58,000, and now, a week later, it has fallen to this level again. Is this a clearing of the pullback or the end of the bull market? Market opinions vary.
From a technical indicator perspective, Bitcoin has shown a bottom divergence in both the 4-hour and daily RSI (Relative Strength Index). This suggests that Bitcoin's price may have fallen too much in the short term, and today's selling pressure is less than that on June 24, indicating a potential for a rebound.
Market sentiment is overly pessimistic; is it time to buy? According to crypto KOL Ignas's analysis, he stated that Bitcoin's price is being artificially suppressed through deceptive sell orders by whales, enticing retail investors and fund managers to sell off for safety.
Just yesterday, CryptoQuant released a report indicating that for most of the time since the halving, Bitcoin miners' compensation has been "extremely low," with transaction fee income now accounting for only 3.2% of total daily income, the lowest share in three months. With insufficient incentives, miners will begin to "surrender," shutting down underperforming equipment and selling Bitcoin to hedge against risks, which historically usually indicates a bottom signal for Bitcoin.
However, there are various signals suggesting that Bitcoin may continue to decline.
From the net flow of Bitcoin ETFs, Markus Thielen, founder of 10x Research, stated in his latest report that he estimates the average entry price for Bitcoin ETF buyers is between $60,000 and $61,000. Therefore, when Bitcoin fell below $60,000 yesterday, it could trigger a wave of ETF liquidations, further driving down Bitcoin's price.
For example, Markus Thielen believes that the weekly and monthly reversal indicators for Bitcoin suggest a broader correction, with prices potentially further retreating to the $55,000 level. Andrew Kang, co-founder of crypto venture capital firm Mechanism Capital, sees an even lower bottom, suggesting that Bitcoin could experience an extreme pullback to the $40,000 range.
Regarding Bitcoin's long-term price, the market still maintains confidence. Standard Chartered Bank predicts that Bitcoin could reach an all-time high in August and hit $100,000 during the U.S. presidential election in November. Analysts at the bank expect that if Trump wins, it will drive up Bitcoin prices, while maintaining year-end and 2025 target prices of $150,000 and $200,000 for Bitcoin, respectively. Fundstrat co-founder Tom Lee also insists that Bitcoin will reach $150,000.
"It's too hard to make money," "I'm sorry, family," are discussions that have frequently appeared in the community over the past month. For retail investors, this bull market has indeed been very challenging.
