Bitcoin price needs just this one catalyst: Pompliano

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As a researcher with experience in the crypto market, I believe that the recent drop in Bitcoin price below $57,000 is a result of several factors, including selling pressure from large institutional sellers and miner capitulation.

The price of Bitcoin continues to trend downward in a bear market, having fallen by more than 21% from its peak this year. On Wednesday, Bitcoin was priced at $57,700, significantly lower than the yearly high of $73,816 that was reached earlier.

Pompliano talks Bitcoin price action

As a financial analyst following the cryptocurrency market closely, I’ve observed and taken note of the recent developments leading Anthony Pompliano, a renowned crypto investor, to conclude that we are now in a Bitcoin bear market.

Previously mentioned, he pointed out that the German authorities are selling off Bitcoins valued at over $2 billion which they obtained by confiscating them from a notorious dark web platform.

As a researcher investigating recent cryptocurrency transactions, I’ve observed that on Wednesday, the government transferred a total of 5,103 coins to Kraken, Coinbase, Cumberland, and Flow Traders. Additionally, I noted significant Bitcoin movements from wallets linked to Mt.Gox, the defunct exchange, according to Pomp’s analysis. He emphasized these findings.

As an analyst, I would explain it this way: “I’ve observed that prices are decreasing in the market. The reason behind this trend is the imbalance between supply and demand, with more sellers than buyers. In this specific instance, there are two significant contributors to the oversupply: first, the German government holds approximately 50,000 seized coins from a pirate website. Second, there’s the distribution of Bitcoin from Mt. Gox.”

Based on his perspective, Pomp posits that the public may be apprehensive about purchasing Bitcoins due to the large influx of new coins entering the market. Additionally, he highlights the fact that Bitcoin’s market is relatively illiquid and these massive flows can significantly impact the coin’s price.

Despite the persistent selling pressure, he remains convinced that Bitcoin’s price drop to around $50,000 has been beneficial. His optimistic outlook extends beyond the current market fluctuations, as he anticipates further growth in the long run.

According to Pomp’s perspective, Bitcoin merely requires the passage of time to thrive, regardless of who between Joe Biden and Donald Trump emerges as the election winner in November.

Anthony Pompliano is a prominent figure in crypto communities, known for his daily newsletter covering business, finance, and technology. He also heads Pomp Investments, an investment firm that has made significant investments in companies such as 1inch, Amber, Alchemy, Arbitrum, and Ankr.

Bitcoin miner capitulation

Bitcoin has experienced a decline lately for reasons beyond just what’s been mentioned. In his interview, Pomp pointed out that historically, Bitcoin’s performance can be lackluster during the summer months when some investors take a break from active trading.

Currently, Ki Young Ju, the founder of CryptoQuant, explains that the decline in Bitcoin’s price is due to miner sell-offs. Evidence suggests that a significant number of miners have begun offloading some of their reserves.

As a cryptocurrency market analyst, I have observed that the ongoing miner capitulation in Bitcoin is showing no signs of abating yet. Historically, this trend concludes when the daily average mined value drops to approximately 40% of the yearly average. Currently, we are at around 72%. Consequently, I anticipate a period of relative calmness in the crypto markets lasting for about 2-3 months. However, it is crucial for investors to maintain their long-term bullish stance while being cautious and avoiding unnecessary risk.

— Ki Young Ju (@ki_young_ju) July 9, 2024

As a researcher studying historical trends in Bitcoin’s price movements, I’ve observed that this particular market downturn tends to come to an end when the daily average mined value drops to approximately 40% of the yearly average. Given that we’re currently at around 72%, it appears that Bitcoin may not offer much excitement for investors in the near term.

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2024-07-10 17:44