Bitcoin price remains in a bear market after dropping by over 21% from its highest level this year. BTC was trading at $57,700 on Wednesday, down from the year-to-date high of $73,816.
Pompliano talks Bitcoin price action
Anthony Pompliano, one of the best-known crypto investors, has shared the reasons he believes that Bitcoin price has moved into a bear market.
As we have covered before, he noted that the German government is liquidating Bitcoins worth over $2 billion that it seized from a dark web site.
The government continued sending these coins in exchanges on Wednesday when it moved 5,103 coins to Kraken, Coinbase, Cumberland, and Flow Traders. Pomp also cited the Bitcoin movements from wallets associated with Mt.Gox, the collapsed exchange. He said:
“Look, prices go down because there are more sellers than buyers and the question is who is selling. In this case, there are two main culprits: the German government has about 50,000 coins that they seized from a pirating website and there is the Mt. Gox Bitcoin that is being distributed.”
Therefore, Pomp believes that people are scared of buying Bitcoins if there are thousands of coins coming to the market. He also noted that Bitcoin is a highly illiquid market and such flows will mostly affect the price.
Still, he believes that Bitcoin price has done well by falling to about $50,000 even as this selling pressure continued. He also expects that the price will continue rising in the longer term.
Pomp also believes that the only catalyst that Bitcoin needs is time, meaning that it will do well whether Joe Biden or Donald Trump wins the election in November.
Anthony Pompliano is a well-known investor in the crypto circles. He writes a daily newsletter on business, finance, and technology. He also runs Pomp Investments, an investment company that has invested in the likes of 1inch, Amber, Alchemy, Arbitrum, and Ankr.
Bitcoin miner capitulation
There are other reasons why Bitcoin has dropped recently. In the interview, Pomp cited the fact that Bitcoin tends to underperform during the summer season when many investors are not actively monitoring and investing.
Meanwhile, Ki Young Ju, the founder of CryptoQuant noted that the Bitcoin price has dropped because of miner capitulation. Recent data has shown that many miners have started selling some of the coins in their treasury.
— Ki Young Ju (@ki_young_ju) July 9, 2024#Bitcoin miner capitulation is still ongoing.
Historically, it ends when the daily average mined value is 40% of the yearly average; it's now at 72%.
Expect the crypto markets to be boring for the next 2-3 months. Stay long-term bullish but avoid excessive risk. pic.twitter.com/OCsiI57KPo
He noted that, historically, this capitulation ends when the daily average mined value moves to 40% of the yearly average. With the figure at 72%, he expects that Bitcoin will be a bit boring in the next few months.