The cryptocurrency market has taken an interesting turn in the last few days, with the price of Bitcoin enduring an intense amount of bearish pressure. On Thursday, July 4, the premier cryptocurrency broke below the $60,000 mark, falling as low as $57,000.

BTC continued its price descent on Friday, with the market leader traveling down below $54,000 at some point. This disappointing price run has been linked to various events, including government selloffs and potential selling after news of the Mt. Gox payout.

Government Bitcoin Selling Is Overestimated: CryptoQuant CEO

In a new post on the X platform, CryptoQuant CEO and founder Ki Young Ju has weighed in on the recent reports of nations’ governments offloading seized BTC assets. Most notably, the German government has been executing various transactions involving significant amounts of Bitcoin in recent weeks.

The FUD (fear, uncertainty, and doubt) from the recent selloffs is believed to be one of the major drivers of the current downward pressure on the Bitcoin price. However, the CryptoQuant CEO believes that the impact of the government selling seized BTC assets is being over-inflated.

This evaluation is based on the realized cap of Bitcoin in about a year. According to CryptoQuant data, $224 billion has moved into the market since 2023, but only $9 billion (less than 5%) is from government-seized BTC. It is worth noting, though, that this data only accounts for Bitcoin seized by the United States and German governments.

Source: Ki Young Ju/X

Young Ju noted in his post that the realized cap here represents the total capital that has flowed into the market since 2023. The “realized” cap differs from the more traditional “market” cap in that it is based on the price of each coin when it last moved.

In a separate post on X, the founder reiterated faith in the long-term promise of the premier cryptocurrency, stating that the Bitcoin bull cycle is not over yet. According to the blockchain firm CEO, the bull run will likely continue until early next year.

What’s more, Young Ju was able to pinpoint the potential top of the Bitcoin cycle using the realized cap metric. The CryptoQuant founder expects the premier cryptocurrency to reach its peak in this cycle around the $112,000 price level.

BTC Price At A Glance

The price of Bitcoin recovered above $56,000 in the late hours of Friday, July 5, and is trading at $56,400 as of this writing. Nevertheless, the market leader is still down by nearly 6% in the last seven days.

BTC price at $56,401 on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image from iStock, chart from TradingView

The cost of producing a Bitcoin is taking a toll on Bitcoin miners whose machines are struggling to yield profits due to the flagship digital asset’s price difficulties.

According to data platform MacroMicro, the average cost of mining a single BTC at the start of June soared to $83,668 but slightly declined to around $72,000 as of July 2.

Bitcoin Mining Machines Becoming Unprofitable

James Butterfill, CoinShares’ head of digital research, shared data showing that Bitcoin price was hovering around the average production cost during the April halving event. Per the data, half of the 14 identified miners, including Bit Digital and Riot Platforms, spend above the average cost to produce their BTC, while Tether-backed Bitdeer and Hut8 spend below average.

Read more: Making Passive Income From Crypto Mining: How to Get Started

This situation was further confirmed by F2Pool, a Bitcoin mining pool operator. It stated that only ASIC machines with more than 23 W/T efficiency were profitable as of July 4.

According to F2Pool data, only six Bitcoin mining machines, including Antminer S21 Hydro, Antminer S21, and Avalon A1466I, are profitable at break-even Bitcoin prices of $39,581, $43,292, and $48,240, respectively. Similarly, other machines like the Antminer S19 XP Hydro, Antminer S19 XP, and Whatsminer M56S++ are profitable, with Bitcoin prices exceeding $51,456, $53,187, and $54,424, respectively.

However, Bitcoin mining difficulty dropped significantly on July 5, marking one of the most notable declines since the FTX collapse. F2Pool explained that this could make more machines profitable. They stated that at a BTC price of $54,000, ASICs with unit power of 26 W/T or less would become profitable. They added that they estimate energy costs at $0.07 per kWh.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Last week, BeInCrypto reported that Bitcoin miners were nearing capitulation levels last seen during the FTX exchange collapse. Consequently, Miners switched off unprofitable machines and intensified selling activities, offloading approximately 30,000 BTC, valued at $2 billion, last month.

“All the miners operating well below their profit points are finally decommissioning their inefficient machines or exiting the industry entirely. […] Presumably many held on for much longer than expected because they anticipated a significant price rise in bitcoin that more than compensated,” explained Con Kolivas, the admin of Solo CKPool.

VanEck remains optimistic as Bitcoin (BTC) price continues to nosedive in the aftermath of woes around the German government and Mt. Gox.

Market corrections are a dreaded scenario, spelling fear among traders. While the otherwise “weak hands” cower, the bold lot seize the opportunity to grow their bags.

VanEck Urges Traders: Buy Bitcoin During Market Panic

Describing the ongoing Bitcoin crash as “4th of July discounts,” VanEck sees BTC price falling to the $53,000 range as a ‘buy the dip’ opportunity. On-chain platform Santiment shares the sentiment, urging bold traders to seize the moment.

“Markets have continued to bleed, and social media is now showing historic levels of FUD. It is rare for an hour to go by where there are more mentions of “sell” than there are “buy” across crypto forums. But we’ve seen a few of these instances in just the past 24 hours, including the largest ratio of negative vs. positive comments thus far in 2024. For bold traders, this is a window where some may wish to be a true contrarian and buy into the crowd’s anger and frustration”.

Amid the negative market sentiment, crypto researchers observe elevated fear levels. This is warranted as many traders suffer losses. Hundreds of thousands are getting “rekt” amid an ongoing bloodbath. Derivative data analysis platform Coinglass reports over $650 million in total liquidations.

Read more: Four Mistakes To Avoid When Trading Bitcoin with Leverage

Pseudonymous trader CryptoNagato reported that this is the second-largest liquidation event in the Bitcoin market after the one right after the FTX collapse in November 2022. All indications point to the ongoing sell-off between Mt. Gox and the German government, with their voluminous transactions stirring markets.

In a Thursday post, German lawmaker and Bitcoin activist Joana Cotar slammed the government for its “hasty” actions selling Bitcoin. Calling the selling spree insensible and counterproductive, she urged the state to emulate the US and hold Bitcoin as a reserve currency.

“Instead of holding Bitcoin as a strategic reserve currency, as is already being debated in the USA, our government is selling on a large scale. I informed Michael Kretschmer, Christian Lindner, and Olaf Scholz, why this is not only not sensible, but counterproductive and invited them to our lecture event (Bitcoin Strategies for Nation States” on October 17th in the Paul-Löbe-Haus) with Samson Mow,”  Cotar wrote.

Cotar’s pro-crypto stance was best seen in November when she backed Bitcoin as legal tender and advocated for its integration into mainstream German finance.

Whales Buy BTC at a Discount

Meanwhile, Ki Young Ju, co-founder and CEO of CryptoQuant, suggests that whales are buying the dip and effectively becoming true contrarians. Based on the report, these traders are opening long positions.

Whales in crypto are investors holding over 1000 BTC, which means they have the power to influence market prices due to their large portfolios. At the moment they are betting on the Bitcoin price increasing in the future.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

CryptoQuant’s Young Ju shares the optimism, saying, “The upward cycle is not over yet.” Nevertheless, he indicates that the ongoing correction could bottom out around the $47,000 threshold, urging spot traders to wait for a strong buying trend.  Looking at the weekly chart for the BTC/USDT trading pair, there is a demand zone around the $47,000 range.

A demand zone is an area with significant buying interest. Market participants would be willing to step in and purchase Bitcoin at $47,000, effectively creating a support level that can potentially lead to a price reversal.