Bitcoin at $61K – All the Reasons Why the Market Is Cooling Down

• Bitcoin price at around PLN 61,000. dollars is a victim of market cooling and summer slowdowns
• The unlocking of Mount Gox and government sales also raise some supply concerns

The cryptocurrency market has been having a rough time recently, as was the case at press time, when the industry’s total market capitalization had fallen to $2.26 trillion. As expected, Bitcoin, the world’s largest cryptocurrency, led the way, with BTC down almost 1% on the charts.

However, Bitcoin and the most popular altcoins on the market were not the only ones that suffered.

For example, the memecoin market also took a hit recession, and market capitalization fell 1.33% to $47.89 billion. In fact, the trading volume also decreased significantly by 19.31%.

Now, a variety of factors have contributed to this market-wide decline, both market-specific events and broader economic influences. So it’s worth taking a look at these factors.

Market cooling after positive news regarding ETH ETF

Positive news on a potential trade Ether ETFs (ETH) has led to a cooling period for the cryptocurrency market. The U.S. Securities and Exchange Commission is reportedly close to approving ETFs pegged to the spot price of Ether, with approval expected as early as July 4.

While these expectations initially fueled market optimism, subsequent market developments contributed to the ongoing economic slowdown.

Additionally, seasonal trends and reduced trading activity during the summer months also impact the market. Historically, June has seen mixed results for Bitcoin, with an average return of -0.56%. Simply put, it was one of the weakest months for the cryptocurrency.

The same was recently highlighted by popular market analyst Dan Crypto Trades.

It can therefore be concluded that the decrease in trading volume during the summer holidays results in lower market activity and higher volatility.

Concerns about the sale of Mt. Gox and the government

The market is also grappling with concerns about the potential impact of Mt.Gox unblocking and sales activities by government bodies. In fact, the same was highlighted in QCP’s latest weekend briefing on the state of the cryptocurrency market.

Some believe supply concerns may be overblown. Still, the potential inflow of Bitcoin from these sources creates uncertainty and contributes to bearish sentiment.

Support levels and future forecasts

Despite these bearish headlines, Bitcoin’s support level around $60,000 has shown resilience. However, if this support level weakens, we could see the cryptocurrency continue to decline. In this way, BTC could test lower levels around $50,000.

QCP analysts even stated that:

“We may test lower levels towards 50k, but the market will find strong support there as TradFi interest continues to grow given the general easing of regulations globally.”

Given this, the anticipated launch of spot ETFs for other major cryptocurrencies such as Solana (SOL) could spark renewed interest and provide some market support.

In light of the prevailing market conditions, analysts recommend strategies for navigating the decline. In Bitcoin’s case, it suggested generating income in a sideways market, with the potential to make directional bets in Q4.

In the case of Ether, it may be beneficial to take a short-term bullish position before the ETF launches.