The Crypto Assets market has suffered a heavy setback, with Bitcoin falling below $54,000.

Recently, the crypto assets market has experienced a significant fall. As of July 5th at 12 PM, the Bitcoin price has fallen below $54,000, quoted at $53,984, with a daily decline of 7.1%. Ethereum also fell below $2,850, with a daily decline of 11%. Other small crypto assets generally fell, with multiple tokens declining over 20%, and some tokens even hitting historical lows. It is worth noting that the dollar index has also fallen below 105 for the first time in recent times.

It is expected that this price fall will lead to the liquidation of approximately $620 million in long positions in the Crypto Assets exchange contract market, further increasing the scale of liquidations.

The recent market crash is influenced by multiple factors, including a certain country's government continuously selling Bitcoin, a previously bankrupt exchange starting to repay debts, and net outflows from Bitcoin ETFs.

The exchange that once went bankrupt begins to repay debts, raising concerns about sell-offs.

Recently, a once-bankrupt well-known exchange has started frequent transfers and initiated debt repayment, raising market concerns about potential selling pressure.

On-chain monitoring data shows that the relevant addresses of the exchange have transferred approximately 47,228 Bitcoins (worth about $2.7 billion) to two new addresses: one received 44,500 Bitcoins, and the other received 2,700 Bitcoins.

Multiple governments sell Bitcoin

The government of a certain European country has recently begun selling Bitcoin that was previously seized from operators of illegal websites. In June, the government sold approximately 4,736 Bitcoins in batches, and in the past week, it sold over 2,000 more. Just this morning, after a market fall, the government transferred 13,475 Bitcoins and has sold 13,000 of them. Currently, the government still holds over 40,000 Bitcoins.

At the same time, a Bitcoin wallet held by the government of a certain North American country, after being silent for a year, sent 4,000 Bitcoins to a certain trading platform on June 27, suspected to have started selling. Yesterday, the wallet address was monitored again and 237 Bitcoins were transferred out.

Bitcoin ETF Continuous Net Outflow

The Bitcoin spot ETF is an important indicator for determining market trends. Data shows that the Bitcoin ETF has experienced net outflows for two consecutive days, with a total outflow amount of 34.2 million dollars over the two days.

Some analysts estimate that the average entry price for Bitcoin ETF buyers is between $60,000 and $61,000. Therefore, when the Bitcoin price falls below $60,000, it may trigger a wave of ETF liquidations, further driving down the Bitcoin price.

In addition, the lack of new funds entering the encryption market is also an important reason why the market has struggled to meet expectations. Since the beginning of May, the total market value of stablecoins in the encryption market has hovered around $160 billion for more than two months, indicating insufficient liquidity in the market and a lack of enough buying power to drive the market up.

Bitcoin falls below the 200-day moving average, bull market cycle questioned

Bitcoin price has fallen below the 200-day moving average (DMA), which is currently at $58,373. This is the first time since August 2023 that it has fallen below this key technical indicator. Since the beginning of 2024, Bitcoin price has been continuously rising, peaking over $70,000 in March. However, the recent price drop below the 200 DMA suggests that the market may be entering an adjustment phase.

Historical data shows that the interaction between Bitcoin and the 200 DMA has been a reliable indicator for judging market trends. Typically, a price breakout above the 200 DMA signals a significant upward trend, while a drop below may indicate the beginning of a long-term bear market.

The current price trend needs to be treated with caution, as it may signify the end of the recent bull market cycle. This dynamic indicates that the Bitcoin market is facing significant pressure during the adjustment process after the halving. Investors need to closely monitor future price directions to assess the next market trend.