Has Bitcoin hit bottom? What do industry insiders say?

Author: Katherine Ross, Blockworks; Compiler: Baishui, Golden Finance

The German government is busy raising funds and trying to sell some of its Bitcoin reserves.

While analysts have been warning about the potential impact of Mt Gox repayments, the German government's move has caught some by surprise.

However, the German government's sell-off was not enough to stop John Glover's bullish attitude. Ledn's chief investment officer believes that Bitcoin could break through $80,000 or even higher by the end of the year, and other analysts expect Bitcoin to reach $100,000.

However, this may not prevent Bitcoin from falling again. He reiterated that, as we reported earlier, he is watching the $55,000 to $56,000 level. If it falls further, watch $49,000.

“You know, a lot of bitcoin is coming into the market. You know, 140,000 or whatever number is, it’s going to be a lot. But as we discussed before, who knows how much of that is going to be sold?” Glover said. Even before Mt Gox, price action “could not break out and make new highs.”

“We went to $73,000 and then tested $72,000. Anybody who was long in the rally from $35,000 to $73,000 in March… I could see them starting to think about taking profits when three attempts to make new highs fail,” he added. As long as they don’t have diamond hands, of course.

Remember, we are also in the heat of summer. For traditional markets, this usually means lower trading volumes. Glover believes that the entry of so many institutional investors means that this trend will also spread to the cryptocurrency market.

“One thing that I find interesting in the last 24 hours of trading is that there hasn’t been a big increase in volume. I would have thought that with volatility going back up from $57,000 to $54,000 again, there should have been a pretty big increase in volume. But we haven’t seen that. That makes me a little nervous because you tend to see a surge in volume at bottoms and tops. But we didn’t see a surge in volume even though we went down and made new lows recently. So that makes me a little nervous that maybe we haven’t seen the bottom yet. But again, it’s hard to say,” Glover said.

The German government’s selling, however, muddies his reading a bit. Still, he thinks the move makes sense.

“I mean, they’ve allegedly sold a lot of Bitcoin in the last 24 to 48 hours. It’s interesting to me that they’ve done that. But you know, it’s not surprising when you see every government is cash-strapped,” he said.

Overall,he estimates that the government has recovered $25 billion worth of Bitcoin, which is just another thing to watch out for as the government will be looking to monetize those assets.

Considering that the market trades about $30 billion to $40 billion a day in Bitcoin alone, this sell-off can be absorbed, he added. So far, the German government has sold about $2 billion, according to David Canellis of Blockworks.

Looking at the chart over the past week, it’s clear that most of the selling occurred during the Asian/European hours — which makes sense given Mt Gox and the German government — but buying interest comes when U.S. buyers start logging in.

“That’s what we’ve seen in the last few sell-offs. European stocks sold off late, Asian stocks sold off early, and then U.S. stocks started buying back in. So I think there was excess inventory in Asia from Mt Gox and traditional financial players looking to buy on the dips. So that scenario makes sense. It’s just a little hard to say who’s going to win this battle between the bears and the bulls,” Glover said.