In early July 2024, the crypto markets found themselves in a precarious position as numerous prominent cryptocurrencies – with Bitcoin (BTC) spearheading the trend – entered into a collapse both large and rapid.
The first days of the month saw two major shocks. First, some $130 billion escaped from the asset class’ market capitalization within a single day, and then, just hours later, almost as much was wiped within 60 minutes.
The downturn also saw the cryptocurrency market fall below a total capitalization of $2 trillion for the first time since late February. By press time on July 5, the total valuation of cryptocurrencies stood at $1.96 trillion.
Total crypto market cap 7-day chart. Source: TradingView
Proving the downturn has not affected only Bitcoin – despite the world’s premier cryptocurrency taking the bulk of the attention – the total crypto market cap that excludes BTC fell some $150 billion from $1.03 trillion on July 1 to $880 billion at press time.
Crypto market cap excluding BTC 7-day chart. Source: TradingView
Can the crypto market reclaim $2 trillion on July 5?
Trading in the early hours of Thursday, July 5, however, also offers a chance for an unexpected recovery. Though the current crypto market cap is well below its yearly high and even its June levels, it has entered an uptrend after apparently bottoming at $1.93 trillion.
Examining Bitcoin’s trends, it started struggling to regain $55,000 early on Thursday morning after staying below the price for several hours during the night. Nonetheless, the current uptrend does not guarantee that the decline is over.
BTC 7-day price chart. Source: Finbold
In the last few weeks, BTC lost its relatively stable level near $67,000 only to hint at a possible recovery at nearly every important support zone – around $61,000, $60,000, and $57,000.
Ultimately, the coin’s trajectory in the coming days will likely depend on just how much of a threat from Mt. Gox’s repayments and the German government’s Bitcoin offloading cryptocurrency investors perceive. The pace of the Mt. Gox repayments and the willingness of creditors to quickly offload their long-awaited BTC will also likely play an important role.
Finally, at least one expert – Peter Shiff – does not believe that the coin will face substantial selling pressure from traders who have invested in Bitcoin exchange-traded funds (BTC ETFs).
Shiff, according to a July 5 X post, believes that most ETF investors are not yet losing money but will start selling should Bitcoin find itself below $38,000. Admittedly, given that such a price is $54,977, the fund danger zone would be reached only after a further 30.88% fall. By this point, a catastrophic selloff would have likely started, no matter what.
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