Bitcoin tumbles to 2-month low

• Bitcoin below 200-day SMA for first time since October
   
• Markets digesting Bitcoin sales by governments, Mt. Gox, and miners
   
• $57k support is crucial for Bitcoin recovery
   
• Bears may aim for $52k Bitcoin if support fails
   
• Friday’s US jobs report could trigger more wild swings

Bitcoin is now at its lowest levels since early May.

Also, the world’s largest and oldest crypto now finds itself below its 200-day simple moving average (SMA) for the first time since October 2023.

The last time Bitcoin fell below this widely-followed technical indicator, it stayed below the 200-day SMA for two months (from August till October 2023).

Why is Bitcoin tumbling?

Markets are digesting reports of mass selling by these 3 groups:

1) US/German governments: News of the US and German governments moving BTC onto exchanges, presumably to be sold, are stoking market concerns of inadequate demand at present for this wave of extra supply.
 

2) Mt. Gox fallout: Administrators of this failed crypto exchange have about $8 billion worth of cryptos, and markets aren’t quite sure just how much of that would be sold.
 

3) Bitcoin miners: With the rewards for mining Bitcoins now reduced by 50% since April’s halving, many miners are resorting to selling their stash of Bitcoin to raise cash and keep their operations running.

Crypto markets starting to size up US Presidential elections

Furthermore, crypto markets are starting to game out who could win the US Presidential elections later in November, and whether the incoming administration is crypto-friendly.

Both Trump and Biden have expressed positive attitudes towards cryptos.

However, amid fevered rumours that US President Joe Biden may be forced to step away from the race ...

Biden's replacement on the Democratic party’s ticket may not be as crypto-friendly.

Such concerns are already weighing on the minds of crypto investors and traders, which in turn could be adding to the selling pressures.

What’s next for Bitcoin

Looking solely at the price charts …

Bitcoin bulls will be hoping that the psychologically-important $57,000 mark can support prices and stem the losses.

If so, this could present an apt buying opportunity for long-term investors.

If the $57k mark fails to hold, then Bitcoin bears (those hoping prices will fall) would be keen to revisit the $52,000 range last seen in February 2024.

And with Bitcoin maturing, prices have been more exposed to macroeconomic factors.

Hence, tomorrow’s (Friday, July 5th) US jobs report may also trigger another big move for Bitcoin.

• Bitcoin could recover if we see evidence of a weaker-than-expected US jobs market in June that pave the way for Fed rate cuts later this year.
   
• Bitcoin could fall even further if we see evidence of a stronger-than-expected US jobs market in June that delays the highly-anticipated Fed rate cuts.