Bitcoin (BTC) Price Continues Its Downtrend as Selling Pressure from Miners, Mt. Gox Refunds, and Actions from the German State of Saxony Continue

Bitcoin is currently trading above the $58,000 mark, having bounced from last week's low of $53,600.

Bitcoin's price continued its downtrend on Thursday, as selling pressure from Bitcoin mining operators, Mt. Gox refunds, and actions from the German state of Saxony persisted. However, a crypto expert told Investing.com that the ongoing downtrend could be “a bear trap.”

Bitcoin fell 1.3% to $57,964.5 by 02:17 ET (06:17 GMT), continuing a decline from March's record high of $73,800, which has seen the world's largest cryptocurrency lose about 15% in the past month.

The sharp decline in Bitcoin price has raised concerns that major Bitcoin miners might start selling some of their holdings to break even, particularly after Bitcoin's halving earlier this year reduced miner rewards.

The㍉defunct Mt. Gox exchange also remained a key issue for Bitcoin, as the exchange's trustees recently started to refund tokens to clients affected by a 2014 hack. The exact amount of this distribution is unclear, but wallets linked to the exchange moved about $9 billion worth of tokens earlier this year.

Moreover, the German government has been offloading Bitcoin confiscated from a piracy website, which is said to be worth at least $2 billion.

These factors, along with the broader risk-off tone in markets this year, have weighed on BTC significantly in the recent period.

Bitcoin technical outlook bearish, but support seen at $57,000 - crypto expert

Bitcoin is currently trading above the $58,000 mark, having bounced from last week's low of $53,600. The cryptocurrency remains in a technical downtrend from March's record high, with consecutive lower highs at $71,300 and $63,900.

After two failed attempts to climb back above the 200-day moving average, which currently coincides with the $63,000 resistance level, BTC has struggled to gain bullish momentum.

Eugene Cheung, head of institutions at Bybit, told Investing.com that while optimism remains for the medium-term outlook, the cryptocurrency market is not immune to abrupt macro events that could significantly impact global market sentiments.

However, Cheung noted that the $57,000 support level has so far helped hold Bitcoin price, pointing to the resilience of the market and limiting further declines.

“If the price can climb back above the 200-day moving average quickly, this recent decline could be considered a bear trap, and a rally higher could be expected,” Cheung told Investing.com.

Historically, market corrections have acted as healthy resets within ongoing bull markets, aligning with well-established trends. Cheung added that there has been a decline in trading activity and crypto prices on centralized exchanges for nearly two months following the halving event in previous Bitcoin cycles, a pattern that has repeated in the current cycle.

“The market cycles can last 12 to 18 months after Bitcoin halving before producing a new cycle top,” he said. “Despite common fears that "this time is different," the cyclical nature of markets often sees history not repeating but certainly rhyming.”

Bitcoin bull-bear market cycle indicator nears critical level

Meanwhile, recent data from on-chain and market data analytics firm CryptoQuant offers a different perspective, suggesting that a major Bitcoin price correction or the onset of a sustained bear market could be imminent.

As seen in the chart below, the profit and loss index, which shows the unrealized profit or loss of all Bitcoin holders, has been hovering around its 365-day moving average in recent weeks, following a crossover to the downside in March.

Previous crossovers of the P&L index below its 365-day moving average, which are shown by the vertical lines in the chart, preceded significant declines in May and November 2021, as well as the onset of the bear market in Q4 2021.

Another metric from CryptoQuant, which is designed to show the cyclical nature of the Bitcoin bull and bear markets, also suggests that Bitcoin could be nearing a critical point in its bull market.

According to CryptoQuant's analysis, Bitcoin has been in a bull market for about 320 days since bottoming out in November 2021, and the market structure has been bullish for 80% of the past 400 days of trading.

“After two failed attempts to climb back above the 200-day moving average, which currently coincides with the $63,000 resistance level, BTC has struggled to gain bullish momentum,” Eugene Cheung, Head of Institutions at Bybit, told Investing.com.

“However, the $57,000 support level has so far helped hold Bitcoin price, showing some resilience in the market and preventing further declines. If the price can climb back

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