Market Sees Signs of Potential Recovery, Is the Worst Over?
The crypto market recovery might be set for a rebound following a decrease in selling pressure according to a tweet by crypto intelligence platform Santiment.
The tweet read, “Looking at July’s outlook, there is a major reason to be optimistic after so much small trader capitulation. The crowd’s negativity and average trader losses means that a relief rally may just be beginning.”
Bitcoin dipped almost 7% in June following increased outflows. It even hit a monthly low of $59,499 on June 24, marking a significant price correction according to data on Coingecko.
Bitcoin’s dip affected other cryptocurrencies as well. However, as sellers lose steam, the market players are setting the stage for a potential bounce back.
Market Recovery the Premium Index Falls to a Negative Level
CryptoQuant data showed that Bitcoin’s price premium on Coinbase recorded an all-time low since the FTX collapse. The Coinbase Premium Index, a metric for measuring Bitcoin’s price disparity on Coinbase showed negative for most of May and June.
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The record was the lowest reading since the crypto dip in November 2022 following the collapse of the popular cryptocurrency exchange FTX.
However, the dip in Bitcoin price according to the Coinbase indicator might lead to a potential rally. According to an X post by David Lawant, Head of Research at FalconX, the dip might be a foreshadowing of a new upswing.
Always darkest before the dawn?
According to my calculations, the last time the Coinbase premium was this negative was a couple of months before the massive rally from Oct ’23 to March ’24. pic.twitter.com/o7iSS4VGHP
— David Lawant (@dlawant) July 1, 2024
Bitcoin’s Increased Sell-Off
A recent report showed that Bitcoin whales sold out most of their assets in June. Data on CryptoQuant disclosed that whales sold off more than $1.2 billion worth of BTC within two weeks and are hesitant to increase their Bitcoin holdings or demand growth.
The U.S. government also joined in the sell-off as another report showed that a known federal wallet address sent 3,940 BTC (equivalent to $240 million) to Coinbase institutional platform, Coinbase Prime.
The set date for the market revival remains uncertain as Mt. Gox’s debt repayment plan set to start this month could lead to another increased selling pressure.