Bitcoin’s price action attempts to recover from the start of Mt. Gox reimbursements, but analysts suggest waiting for longer-term confirmation of a trend change.
Bitcoin sought a rebound as the market digested the start of Mt. Gox repayments. Data showed a 3.8% price recovery from lows of $55,550, the lowest level since late February.
Bitcoin Bull Market: “Rocky Road Ahead”
The recent sell-off, which saw Bitcoin prices drop sharply, has been attributed to the beginning of transfers from wallets linked to the Mt. Gox rehabilitation process. These transfers involve over $8 billion in Bitcoin and Bitcoin Cash being distributed to Mt. Gox creditors.
Trader Daan Crypto Trades noted the market’s reaction: “The first transfers have begun. The market sold off again following these transfers. Now comes the time where we’ll figure out how much is getting sold and how the market absorbs it. Rocky road ahead, but after this massive supply overhang is cleared, that’s great for the space in the long run.”
Despite the recent downturn, Bitcoin’s price still respects a broad downward trending channel. Even cautious traders see this as a potentially positive sign. “Interaction with channels usually means a corrective pattern (consolidation before continuation),” noted a trader known as Il Capo of Crypto.
Testing the Market Structure
Some traders, like Jelle, noted that Bitcoin’s higher timeframe market structure is being tested. He highlighted the importance of closing above $57,000 to maintain a bullish structure. “As it stands, we’re looking at a lower low — but it all depends on the candle close, which coincides with the weekly candle close. Close above $57k and structure remains bullish.”
Ichimoku Cloud Indicator
The latest weekly candle also puts pressure on the bull market from the perspective of the Ichimoku Cloud indicator. This indicator, often used to predict future price movements, suggests that Bitcoin’s market remains under stress.
Summary Review: While Bitcoin’s recent price action shows signs of recovery, the market faces a challenging path ahead due to the Mt. Gox repayments. The broader trend remains uncertain, with analysts emphasizing the need for a longer-term confirmation of any trend change. Investors and traders should keep a close eye on key levels and market structure as the situation develops.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
