QCP Capital: Surge in supply and macroeconomic difficulties lead to a drop in Bitcoin prices

PANews reported on August 4th, according to News.bitcoin, QCP Capital pointed out in its recent market report that the market has experienced a significant correction. The price of Bitcoin fell from $70,000 to nearly $60,000. This decline was mainly due to an unexpected surge in Bitcoin supply. Several key events caused this supply shock, including the U.S government releasing about 28,000 Bitcoins; Mt Gox's settlement agreement allocating 33,960 Bitcoins; and Genesis creditors distributing Bitcoins and Ethereum worth $1.5 billion. These factors together put tremendous downward pressure on the market.

In addition to increased supply, QCP also emphasized the impact of recent mining difficulty increases. The difficulty level soared by 10.5%, reaching a historical high which added extra pressure on miners forcing them to liquidate their assets.

Macroeconomic indicators have also fueled bearish sentiment. QCP pointed out that higher than expected unemployment rate of 4.3% and concerns about an impending economic recession intensified investor worries. Analysts at QCP stressed that Chicago Board Options Exchange Volatility Index (VIX), a key indicator measuring market volatility surged above 28 - highest since regional banking crisis in March 2023 further exacerbating market unease.

Despite turbulent market conditions, volatility for both Bitcoin and Ethereum remained relatively stable with front-end volatility slightly rising from 45% to 48%, while back-end volatility remained unchanged.
Market strategists interpret this as a signal that despite recent turbulence they expect price fluctuations over the next few months will stabilize.