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

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Harvey Hunter
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Harvey Hunter is a Junior Content Creator at Cryptonews.com. With a background in Computer Science, IT, and Mathematics, he seamlessly transitioned from tech geek to crypto journalist.

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Joe Burnett, a former Blockware Solutions analyst and senior product marketing Manager at Unchained, forecasts an ease in market conditions only when Bitcoin sell-off pressure from Mt. Gox and Germany abates.

This comes as the crypto market is staring down its toughest headwind in months as the anticipation of Bitcoin (BTC) sell-offs from Mt. Gox and the German government begins to weigh heavily on investors’ minds.

As of July 4, Germany has transferred 3,000 BTC in portions to Coinbase, Kraken, and Bitstamp, adding to a series of recent German BTC transfers.

Given that Germany still holds a massive 40,359 BTC in their reserve, currently valued at $2.22 billion, tension is high.

Meanwhile, Defunct exchange Mt. Gox transferred $2.7 billion worth of Bitcoin in preparation of the $9 billion payout process to repay creditors.

It marks the exchange’s first significant transaction since May, following several smaller test transactions on Wednesday.

Bitcoin shed 7% of its value late Thursday, sending prices to their lowest point in four months to $53,550, and sparking a flurry of liquidations across the crypto market.

Bitcoin Sell-Off Presser To Ease

Amidst this high tension, observers are speculating where Bitcoin prices could be headed next. Some predict that market conditions may ease only when selling pressure from Mt. Gox and Germany subsides. Burnett believes this will “mark a bottom.”Burnett theorizes that large buyers might lower their bids to avoid overpaying for Bitcoin, causing the price to drop further. After the sale, the price may stabilize or rise again, he said.

John Glover, Chief Investment Officer at Ledn, shared this view in his comments on the Mt. Gox situation during a CNBC interview.

He noted the sum to be relatively insignificant—”$9 billion of Bitcoin in a market that trades $30 to $40 billion a day in Bitcoin.”

Glover emphasized that resolving this looming situation would boost overall confidence, potentially causing Bitcoin to rally after the “summer doldrums.”

The Market Needs a Catalyst to Recover

Given the current negative market sentiment, any renewed positive price action will likely require a significant catalyst.

One credible possibility is the approval of US spot Ethereum exchange-traded funds (ETF) during the third quarter, which could potentially trigger a bull run. The approval of spot Ether ETFs is expected to attract institutional investment.

Many large financial institutions and asset managers have been hesitant to invest directly in crypto due to regulatory uncertainties and the complexities involved in holding digital assets. However, a regulated ETF would provide a familiar and compliant vehicle for these entities to gain exposure to Ether.

Despite this promising prospect, some speculate that the impact of Ether ETFs will not match that of Bitcoin ETFs, which catalyzed Bitcoin’s surge to new all-time highs.

The SEC has approved eight companies to launch Ethereum ETFs, but the approval process is ongoing. According to SEC Chair Gensler, the launch is said to be progressing “smoothly.”

As required by the SEC, the funds have started to file their S-1 forms, another layer of the approval process where the regulator examines the specific details of each ETF.

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

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