Strong Bitcoin ETF inflows and growing speculation about a September rate cut have driven BTC’s price upward today.
Bitcoin (BTC) rebounded by 6.40% on July 6, reaching $56,975 after hitting a five-month low the previous day. This recovery indicates that traders are beginning to overcome the bearish effects of Mt. Gox’s $8 billion BTC reimbursement and the recent BTC selloffs by the U.S. and German governments.
Bitcoin Analysts Attempt to Calm Panic Sellers
Over the past 24 hours, leading crypto analysts and influencers have worked to downplay the impact of the Mt. Gox reimbursements and the BTC selloffs by the German and U.S. governments on Bitcoin’s long-term bullish outlook.
Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant, reminded traders that the governments controlled $8 billion worth of BTC, which is just 4% of the total $225 billion that has entered the Bitcoin market since 2023.
In other words, the Bitcoin market has sufficient liquidity to absorb the impact of government-led BTC selloffs, especially amid fears that the German government may dump the remainder of its Bitcoin holdings—about 42,000 BTC as of July 6—in the coming days.
Similarly, independent market analyst Trader Tardigrade likens the current Bitcoin market selloff to past black swan events, which led to sharp rebounds and subsequent extended bull cycles. He noted:
“In 2016, 2020, and 2024, $BTC moved in the same pattern. Besides 2020, $BTC Fakeout was seen below the trendline. After reclaiming above trendline, a Bull Run follows.”
Analyst Rekt Capital argues that the current Bitcoin market selloff is part of the typical cycle that occurs after a Bitcoin halving event. In this post-halving trend, Bitcoin often experiences a significant price drop for several months as the market adjusts to the new supply dynamics. However, as the reduced supply begins to impact the market, the price eventually recovers and often enters a strong upward trend due to lower supply and higher demand driving prices up.
Bitcoin Traders Playing Catch-Up to Stocks
Bitcoin’s sharp recovery today takes cues from the U.S. stock market’s rally to a record high. In a post-holiday session with thin trading volume, the S&P 500 reached its 34th record high of the year. Equities rebounded after a volatile period following data that showed a slowdown in U.S. hiring and the highest jobless rate since 2021.
As a result of disappointing jobs data, Wall Street bets are now pointing to a 72% probability of a rate cut in September compared to 55.4% a month ago. Rate cuts are typically bullish for Bitcoin and other riskier assets, as they reduce the opportunity cost of holding lower-yielding U.S. Treasury notes.
Summary Review: Bitcoin’s price surge today can be attributed to strong ETF inflows, increasing speculation about a rate cut, and the market’s ability to absorb government BTC selloffs. Analysts remain optimistic, suggesting that the current selloff is part of Bitcoin’s typical post-halving cycle, which often leads to a strong upward trend as supply decreases and demand increases.
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.
