Bitcoin's Wobbly Rebound: Mt. Gox, Fed Policy, and the $100,000 Dream
Bitcoin has experienced another dip fueled by concerns about potential Bitcoin sales from creditors of the defunct Mt. Gox exchange. This has cast doubt on the sustainability of the crypto bull run that began in 2023.
Mt. Gox, which went bankrupt a decade ago after a major hack, is set to return $8 billion worth of Bitcoin to creditors in stages. This potential influx of Bitcoin into the market has added to the selling pressure.
German government disposals of seized Bitcoin and waning inflows into US Bitcoin ETFs have also contributed to the bearish sentiment. Some are questioning the viability of the $100,000 Bitcoin prediction.
Technical Analysis: Signs of a Capitulation?
Analysts are scrutinizing charts for signs of a capitulation that could mark the end of Bitcoin's decline. Tony Sycamore, market analyst at IG Australia, highlights the 200-day moving average as a key indicator.
Prolonged Losses and Monetary Policy
Bitcoin has been on a five-week losing streak, the longest since the 2022 bear market. Some experts, like Stefan von Haenisch, head of trading at OSL SG, believe the Federal Reserve's monetary policy could influence the direction of Bitcoin's price.
Spot-ETF Flows: Strong Demand Moderates
The initial surge in demand for US Bitcoin ETFs fueled Bitcoin's record-breaking rally. However, inflows have since moderated. While some ETF investors are buying the dip, the question remains whether the recent weakness will deter further investment.
Options Market: Bullish Bets Remain
The options market reveals that some investors are viewing the current Bitcoin dip as temporary. Deribit data shows a high concentration of bullish wagers around the $100,000 strike price. This optimism may be linked to expectations of a loosening Fed monetary policy and Donald Trump's pro-crypto stance.
Global Market Influence and Fed Testimony
Caroline Mauron, co-founder of Orbit Markets, believes the crypto market will be influenced by global markets and upcoming events like Fed Chair Jerome Powell's testimony and US inflation data. These events could impact projections for monetary policy.
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