Bitcoin’s (BTC) price took a hit on July 4, dropping by 4.2% over the past 24 hours to trade at $57,634 at the time of writing.
This brings the cryptocurrency to its lowest point since early May.
Rachael Lucas, a crypto analyst at BTC Markets, explained that falling below the $60,000 resistance line represents a psychological threshold for many investors. She indicated that if Bitcoin stays under this level, short-term volatility might increase.
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One major factor influencing this volatility is the upcoming $9.6 billion worth of BTC repayments to creditors of the long-defunct crypto exchange Mt. Gox, which will add significant selling pressure to the market.
Additionally, spot Bitcoin exchange-traded funds in the US have seen declining trading volumes, with figures dropping to around $807 million on July 3.
Despite these challenges, Lucas suggested that if market liquidity remains strong, Bitcoin might rebound as it has after previous sell-offs.
QCP Capital analysts also anticipate a Bitcoin rebound in July, citing the cryptocurrency’s historical positive performance during this month:
Looking at seasonality, BTC has a median return of 9.6% in July and tends to bounce back strongly especially after a negative June (-9.85%).
Nonetheless, investors should prepare for potential volatility in the near term.
In other news, the US government recently transferred 3,940 BTC to a Coinbase Prime wallet.
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