Bitcoin Price Decline Persists Amid ‘True Correction’ Concerns: What’s Next?

Bitcoin’s price has been declining recently, experiencing a 17% drop over the past month and reaching its lowest point since February 2024. Although there has been a slight resurgence in the last five days with a 1.33% increase, this does little to counterbalance the significant decline observed in prior weeks.

The cryptocurrency’s price fell to approximately $53,500, prompting renewed buying interest and bringing it back to the previous support level of around $56,500. Currently trading near $57,800, Bitcoin has fallen below the crucial $60,000 benchmark.

The essential question now is whether Bitcoin will regain its previous highs or if it will decline further, possibly revisiting the lows of 2022 that severely impacted the cryptocurrency market.

### Factors Contributing to Bitcoin’s Recent Drop

Two main factors have contributed to the drop in Bitcoin’s price. The first is the potential distribution of confiscated Bitcoin from the defunct Tokyo exchange, Mt. Gox. This exchange, once a major player in the crypto space, collapsed after losing most of its assets to hackers between 2011 and 2014.

The second contributing factor is the significant sale of Bitcoin by the German government. Over the past few weeks, Germany has been liquidating large amounts of Bitcoin, totaling several hundred million dollars. The recent sell-off accelerated, with around $75 million worth of Bitcoin being moved to exchanges. Since mid-June, approximately $315 million worth of Bitcoin has been sold, reaching over $390 million in total in a short span.

Despite these sales raising market concerns, they constitute a small portion of Germany’s overall Bitcoin reserves, with 40,359 Bitcoins still held in reserve. Notably, the German government recently moved back 1,915 Bitcoins valued at approximately $111.5 million.

### Market Reactions

As Germany continues to liquidate its Bitcoin holdings, market analysts view this as an opportunity for investors to take advantage of the dip. These ongoing sales are being closely watched, with predictions of short-term market volatility. The broader implications of these actions for Germany’s financial outlook and the cryptocurrency market overall are subjects of ongoing debate.

Some analysts suggest that Bitcoin’s current performance could reflect a “summer lull,” a phenomenon observed in previous cycles. The future trajectory of Bitcoin in the fourth quarter will depend on its ability to reclaim and maintain key price levels in the near term.

Adding to the market’s uncertainty is a noticeable decrease in whale transactions, which have dropped from 17,000 to below 12,000 within just one week. This decline may indicate a decrease in interest from larger investors or suggest a potential consolidation phase.

Notable trader Peter Brandt has expressed a bearish outlook, predicting that Bitcoin could fall to $44,000. He warns investors about the current correction and highlights that Bitcoin has breached its 200-day exponential moving average, a long-standing support level. This breach raises the possibility of a more significant downward correction in the near future.