Bitcoin Could Drop to $50,000, but Macro Factors and a “Buy the Dip” Mentality Will Swiftly Drive It Up

Volatility Expected as Bitcoin Hits New Lows On July 5, the price of Bitcoin dropped to a low of $53,600 on Coinbase.

Bitcoin price hit a low of $53,600 on Coinbase on July 5. This marks the first time the commodity has traded at this price since February. Analysts are concerned that the worst is yet to come.

Bitcoin price now trades at $54,500.35, showing a minimal gain on the day, reaching a high of $55,182.53 and a low of $53,600, according to data from CoinMarketCap.

Bitcoin price dropped to $53,600 — What’s next? A sell-off analysis

A large portion of the sell-off may be due to anxieties over the obligations that Mt. Gox owes to its creditors, according to eToro market analyst Josh Gilbert. These repayments will see roughly $8 billion in Bitcoin hit the market starting this month.

After Bitcoin saw a rapid drop to the $53,600 level, Gilbert anticipates that the price movement for Bitcoin will become even more volatile in the days ahead.

"The news flow is far more bearish than bullish right now, and the selling activity we’re seeing is quite clearly unsettling investors, which often drives more selling," Gilbert told us in a statement.

Meanwhile, 10x Research analysts have predicted that BTC price may hit $50,000 in the coming weeks as sellers "scramble to find liquidity" and a lack of support could see selling accelerate.

"Bitcoin saw good support around the $55,000 level, including its 200-day moving average and trend channel support," Markets analyst Tony Sycamore said in an investment note seen by Cointelegraph on July 3. If Bitcoin's price remains above $55,000 in the next weeks, "leading to a retest and break of the March $73,794 high."

Despite the bearish outlook in the short term, there is a case for investors to remain optimistic on a longer-term time horizon, according to Gilbert.

"We look to catalysts such as the Federal Reserve cutting interest rates in September, with the potential for another cut in December to lift prices," he said. “On top of that, the full acceptance of an Ethereum ETF from the SEC, with a July launch date, would be a big boost for the crypto market.”

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