The cryptocurrency market continues its downward spiral, with Bitcoin slump in focus. The world’s most popular digital currency dropped to its lowest price since February today, settling at $53,485.93. However, it appears to have recovered some lost ground. Despite this rebound, concerns linger regarding Bitcoin’s long-term viability, and warnings from prominent critics continue to cast a shadow.
Schiff’s Skepticism Fuels Market Concerns
Peter Schiff, a long-time Bitcoin skeptic, seized the opportunity to reiterate his doubts about the cryptocurrency’s future. His latest concern focuses on Bitcoin exchange-traded funds (ETFs), which offer investors exposure to Bitcoin without directly holding it. Schiff predicts a massive sell-off from these ETFs if the price dips further.
His analysis suggests that with Bitcoin hovering around $54,000, over 70% of Bitcoin ETF investors are currently underwater. If the Bitcoin slumps below $38,000, all ETF investors would be in negative territory, potentially triggering panic selling as they scramble to exit their positions. This mass exodus, according to Schiff, could further destabilize the already volatile market.
This isn’t Schiff’s first foray into Bitcoin pessimism. He previously highlighted Bitcoin’s significant decline from its all-time high, both in USD terms and when compared to gold. These pronouncements add fuel to the ongoing debate about Bitcoin’s efficacy as a store of value, particularly in light of recent price fluctuations.
Joining the chorus of concern, On-chain analyst Ali Martinez has raised concerns about Bitcoin slump in a recent X post dated 5 July. Martinez stated that there is not enough support to prevent Bitcoin from dropping further. He mentioned that significant buying might only occur around $47,000, which could help stabilize the price.
For the price to keep going up (bull run to resume), Bitcoin ideally needs to climb above $61,000 and stay there (close and hold). If it can’t break past that resistance level, it might struggle to keep rising.
Market Jitters and Mt. Gox Factor
The current market sentiment reflects investor anxiety. At the time of writing, Bitcoin is down 2.57%, trading at $56,697.09 with a daily volume of $55.95 billion. The price range for the past 24 hours has been concerning, with a low of $53,971.30 and a high of $57,453.84. However, the current price recovery offers hope for investors.
Adding to the market jitters is a recent move by Mt. Gox, the now-defunct cryptocurrency exchange, which transferred a staggering $2.7 billion worth of Bitcoin to an unknown wallet. This unexpected activity has caused concern within the crypto community.
Additionally, U.S. spot Bitcoin ETFs saw outflows of $13.7 million and $20.45 million over two consecutive days, indicating investor fear. Following the market downturn, Ethereum fell to $2,983.33, a drop of 5.05% over the last 24 hours. Binance Coin also decreased to $496.53, down 5.41% in the same period. Meanwhile, Solana was the best performer among the top 5 cryptocurrencies by market cap, showing a small increase of 1.16% to $135.62.
Despite the downturn in Bitcoin price, its dominance in the cryptocurrency market increased slightly compared to yesterday. This suggests that altcoins, smaller cryptocurrencies, might be experiencing even steeper price drops.
The Bitcoin market remains unstable. Open interest, which measures outstanding derivative contracts, dropped by 7.24% to $28.17 billion. With the total market capitalization around $1.10 trillion, all eyes are on whether Bitcoin can arrest its slide or succumb to further declines.
Also Read: Bitcoin Drop Below $58K Sparks ‘Buy-the-Dip’ Trend