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Bitcoin experienced a notable drop in early Asian trading hours, falling from $62,000 to $60,268, marking a 3% decline.
This downturn has also affected other major cryptocurrencies, with Ethereum, Solana, and Dogecoin each falling roughly 3%.
The cryptocurrency market is currently grappling with multiple pressures, particularly the anticipated distribution of Bitcoin from the defunct Mt. Gox exchange that’s expected to begin this month.
Singapore-based crypto trading firm QCP Capital highlighted the market's focus on this issue.
"The Mt Gox release is also slated to happen this week," the firm wrote in its Telegram group. "This overhang of up to 140,000 BTC should continue to weigh on markets, especially since the exact release schedule is unknown right now."
Despite these concerns, Bitcoin has managed to find support above the $60,000 mark, while Ethereum remains above $3,300, a positive sign, according to QCP Capital.
Crypto analyst Ali has pointed to significant liquidation risks in the market if Bitcoin manages to bounce and cross the psychological barrier of $62,000.
"Over $1 billion will be liquidated if #Bitcoin now rebounds to $62,600," he wrote this morning.
He also identified critical resistance levels for Bitcoin, stating, "One of the most crucial resistance areas for #Bitcoin is $65,795. If $BTC can break past this level, the next significant target is $78,700!"
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, offered a longer-term perspective on the current market dynamics, in an interview with CNBC.
"Bitcoin is probably struggling from the Mt. Gox starting distribution since July that was a huge overhang for many years but if I was investing in crypto knowing that one of the biggest overhangs is going to disappear in July, it’s a reason to expect a strong rebound in the second half of the year."
Lee remains optimistic, suggesting that $15,000 for Bitcoin is still within reach, emphasizing that Bitcoin tends to make most of its gains within a limited number of days each year.
The market is also closely monitoring developments related to cryptocurrency exchange-traded funds (ETFs).
QCP Capital noted the market's attention on the potential approval of a spot Ethereum ETF, though they believe an approval this week is unlikely.
Meanwhile, adding to the negative sentiments, Bitcoin spot ETFs experienced a net outflow of $13.6 million on July 2, following several days of net inflows, according to data from SoSo Value.
Notably, Grayscale's ETF GBTC saw a single-day outflow of $32.3779 million, while BlackRock's ETF IBIT and Fidelity's ETF FBTC recorded single-day inflows of $14.1 million and $5.4 million, respectively.
Edited by Stacy Elliott.