Bitcoin Market Bottom Predicted Amid Mt. Gox and Germany Sell-Offs

Germany & Mt. Gox Bitcoin Sell-Offs ‘Likely’ to Mark Market Bottom

Joe Burnett, a former Blockware Solutions analyst and current Senior Product Marketing Manager at Unchained, predicts that the Bitcoin market could stabilize once the sell-off pressures from Mt. Gox and Germany ease.

The crypto market is currently facing significant challenges as the anticipation of Bitcoin (BTC) sell-offs from Mt. Gox and the German government creates anxiety among investors.

On July 4, Germany transferred 3,000 BTC to Coinbase, Kraken, and Bitstamp, adding to recent significant BTC movements. Germany still holds 40,359 BTC, valued at approximately $2.22 billion, causing considerable market tension.

Meanwhile, the now-defunct Mt. Gox exchange has transferred $2.7 billion worth of Bitcoin in preparation for a $9 billion payout to creditors. This marks the exchange’s first major transaction since May, following smaller test transactions earlier in the week.

Bitcoin’s value dropped by 7% late Thursday, reaching a four-month low of $53,550 and triggering widespread liquidations in the crypto market.

Bitcoin Sell-Off Pressure to Ease

Observers are speculating about Bitcoin’s future price movements. Some believe that the market conditions might improve once the selling pressure from Mt. Gox and Germany decreases. Burnett suggests this will “mark a bottom.”

Burnett theorizes that large buyers may lower their bids to avoid overpaying for Bitcoin, potentially causing a further price drop before stabilization or a price increase post-sale.

John Glover, Chief Investment Officer at Ledn, echoed this sentiment during a CNBC interview. He downplayed the $9 billion worth of Bitcoin being sold by Mt. Gox, noting it is a small fraction of the $30 to $40 billion daily Bitcoin trading volume. Glover believes resolving this issue will restore market confidence, possibly leading to a Bitcoin rally after the summer.

The Market Needs a Catalyst to Recover

Given the current negative market sentiment, a significant catalyst is needed for renewed positive price action.

One potential catalyst is the approval of US spot Ethereum exchange-traded funds (ETFs) in the third quarter, which could ignite a bull run. Such approval could attract institutional investment, providing a regulated and compliant investment vehicle for entities hesitant to hold digital assets directly.

However, some speculate that the impact of Ether ETFs might not be as substantial as that of Bitcoin ETFs, which propelled Bitcoin to new all-time highs.

The SEC has approved eight companies to launch Ethereum ETFs, with the approval process reportedly progressing smoothly according to SEC Chair Gary Gensler. The funds have begun filing their S-1 forms, a necessary step in the approval process.

Although this process can take several weeks, a recent Bloomberg report suggests that it might be expedited, potentially allowing ETFs to start trading by mid-July.