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Bitcoin Rebounds Toward $60K, but Choppiness Likely to Persist: Analysts
The market will have to absorb $4 billion to $7 billion of bitcoin selling pressure throughout the middle of the year, which will weigh on prices, K33 Research said.
Updated Jul 9, 2024, 9:28 p.m. Published Jul 9, 2024, 9:28 p.m.
Cryptocurrencies rebounded on Tuesday with bitcoin (BTC) climbing nearly 3% to around $58,000 as fears after last week's breakdown allayed.
The recovery was broad-based, with the market benchmark CoinDesk 20 Index up 2.4% over the past 24 hours, led by gains by solana (SOL), filecoin (FIL) and native tokens of Avalanche (AVAX) and Internet Computer Protocol (ICP).
The grind higher could last a while with BTC potentially reaching $60,000, but the rally will be short-lived, said Markus Thielen, founder of 10x Research.
"The $55,000-$56,000 range is forming a base from a technical analysis perspective. However, given the medium-term technical damage, we anticipate no more than a short-term tactical bullish countertrend rally," Thielen said in a Tuesday market update.
"We anticipate Bitcoin could rally back to nearly $60,000 before experiencing another decline to the low $50,000 range, creating a complex trading environment," he added.
Seasonal trends are not helping bitcoin either, with the third quarter historically offering the weakest returns, Vetle Lunde, senior analyst at K33 Research, noted Tuesday.
Weak seasonality coincides with the German state of Saxony selling seized assets and the ongoing distribution of Mt. Gox refunds weighing on prices, he added.
Read more: It's Not Germany Selling Bitcoin. It's One of Its States and It Has No Choice.
According to K33 Research's estimates, the market will have to absorb 75,000 to 118,000 BTC of selling from Saxony and Mt. Gox customers throughout the summer, worth $4.3 billion to $6.8 billion at current prices.
"We expect these flows to burden performance in the months to come and the choppy market conditions to last until October," Lunde said.
Krisztian Sandor
Krisztian Sandor recently graduated from NYU's business and economic reporter program as a Fulbright fellow and worked with Reuters and Forbes previously. Originally from Budapest, Hungary, he is now based in New York. He holds BTC and ETH.
