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. This is the first time that the commodity has traded at this price since February of this year, and analysts are concerned that the worst is yet to come.

According to the data provided by CoinMarketCap, Bitcoin has now reached a plateau and is currently trading at $54,500.35 at the time of publication.

Mt. Gox Payouts: A Looming Threat to Bitcoin Stability

eToro market analyst Josh Gilbert stated that a significant portion of the sell-off may be linked back to anxieties that stemmed from the obligations that Mt. Gox owed to its creditors. These repayments will result in around $8 billion worth of Bitcoin being released onto the market beginning this month.

After Bitcoin saw a rapid drop to the $53,600 level, Gilbert stated that he anticipates the price movement for Bitcoin to 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," said Gilbert.

Additionally, 10x Research analysts have forecasted that Bitcoin's price might go as low as $50,000 in weeks to come due to sellers' "scramble to find liquidity" and possible acceleration of selling if support is destroyed.

Hope on the Horizon: Potential Triggers for Bitcoin's Recovery

According to IG Markets analyst Tony Sycamore, who was quoted in an investment note that was viewed by Cointelegraph on July 3, if Bitcoin had good support near the $55,000 level, including its 200-day moving average and trend channel support, then the uptrend should resume if Bitcoin's price remains above $55,000 in the next weeks, "leading to a retest and break of the March $73,794 high."

Per Cointelegraph, Gilbert stated that there are grounds for investors to maintain an optimistic stance on a longer-term time horizon, despite the fact that the view is gloomy in the short term.

“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.”