The price of Bitcoin has once again surpassed the $62,000 mark, sparking optimism among analysts who believe the worst is over. This surge follows significant market disruptions, including substantial sales by the German government and the anticipated Mt. Gox repayments.
In recent days, Bitcoin has experienced a significant recovery, rising 5.2% in 24 hours, from a low of $53,500 on July 4 to $62,550, according to TradingView data. This is the first time Bitcoin has held above $62,000 since early July.
Ben Simpson, founder of the crypto education platform Collective Shift, believes that Bitcoin has reached its “local bottom” and is now ready for an upward trend. Simpson attributes the previous price drop to forced sales, with approximately $3 billion sold by the German government and concerns related to Mt. Gox repayments. On July 12, the Crypto Fear & Greed Index fell to its lowest level in 18 months as Bitcoin hovered around $59,000. However, Simpson argued that this sentiment did not reflect the market fundamentals.
Looking ahead, Simpson identifies several bullish factors for Bitcoin, including potential interest rate cuts hinted at by Federal Reserve Chair Jerome Powell and new highs in the S&P 500, along with strong inflows into Bitcoin ETFs.
Market analyst Josh Gilbert from eToro believes the worst is over for Bitcoin, suggesting that any short-term weaknesses will be opportunities for investors.
Gilbert also points to political developments, such as the increased odds of Donald Trump winning the upcoming election, as potential catalysts for Bitcoin’s price growth, given his pro-crypto stance.
However, Gustavo Schwenkler, director of the Australian crypto exchange Cointree, warns that while the market has largely absorbed the narrative of Mt. Gox repayments, significant price increases will not happen overnight. Schwenkler highlights lower-than-expected US inflation and the possibility of rate cuts as positive influences for the crypto market.
Mark Hiriart, head of sales at crypto asset manager Zerocap, underscores the importance of Bitcoin maintaining support above $60,000 and reclaiming its 50-day and 100-day simple moving averages to ensure further gains. Despite the optimism, Hiriart warns of potential market pressure due to Mt. Gox repayments, as creditors may decide to cash in their profits after a decade-long wait. He anticipates that short-term market pressure will persist through the summer months.
In summary, while Bitcoin’s recent rally is promising, market experts advise caution, noting that sustainable growth will require overcoming several hurdles. Nevertheless, the easing of previous market pressures and favorable macroeconomic conditions suggest that Bitcoin could continue to rise in the coming months.
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