Bitcoin price action has experienced significant bearish sentiments fueled by the Mt. Gox repayments and ongoing sell-offs by the German government.
After closing last week on a bearish note, Bitcoin (BTC) price opened the second week of July on a mild bullish outlook. The flagship coin rebounded around 5 percent in the past 24 hours to hover around $57k at the time of this report. However, mild panic in the crypto market, fueled by low demand for the United States-based spot Bitcoin ETFs, has increased the overall fear.
Bitcoin’s fear and greed index slipped from above 44 percent last week to around 28 on Monday, suggesting increased fear in the market.
Nonetheless, on-chain data shows smart money has been accumulating in the past few days with increased fear.
Moreover, Bitcoin price is in a macro bullish outlook that was confirmed by the recent fourth halving event and the approval of spot BTC ETFs in several jurisdictions.
Mixed Demand for Bitcoin from Institutional Investors
The institutional demand for Bitcoin in the past few weeks has wavered significantly. As Coinspeaker previously noted, the initial cash inflows to the US-based spot Bitcoin ETFs, amid the notable sell-offs by the German government, have weighed heavily on the bullish sentiments.
The ongoing Mt. Gox crypto repayment of more than $8 billion, which will continue in the next three months, has been a major contributor to the ongoing crypto capitulation.
Meanwhile, the repayment of the FTX creditors, amounting to around $16 billion, is expected to kickstart in the fourth quarter.
The ongoing Bitcoin selloff has, however, presented a buying opportunity for long-term investors. Moreover, Bitcoin has been identified as a long-term insurance investment against ongoing fiat debasement.
On Monday, Metaplanet Inc announced that it had purchased an additional 42.47 Bitcoins, worth around $2.42 million. As a result, Metaplanet now holds a total of 203.734 Bitcoins, which have been purchased following the recent approval of the board members.
The company now joins the likes of MicroSrategy Inc (NASDAQ: MSTR), which adopted the Bitcoin plan several years ago to hedge against rising inflation and poor monetary policies.
What Next for BTC Price Action
Bitcoin price has been forming a bullish flag in the past four months, which could yield a major uptrend breakout at the tail end of this year. After closing below the 200D Simple Moving Average (SMA) in the past five days for the first time since October, top analysts led by Benjamin Cowen believe a bullish breakout in Q4 is highly likely.
Something like this maybe.
2019 vs 2024$BTC pic.twitter.com/7YM10kHbWb
— Inmortal (@inmortalcrypto) July 8, 2024
From a technical standpoint, Bitcoin price is likely to consolidate above $56k and below $73k in the coming weeks. However, if the flagship coin fails to defend the support level above $56k ahead, further capitulation towards $48k will be inevitable.
Meanwhile, Cowen indicated that Bitcoin dominance will continue to rise towards 60 percent in the coming months before reversing to pave the way for the much-anticipated altseason.
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