The cryptocurrency market experienced a major sell-off on Friday, exacerbating the selling pressure seen over the past two weeks, with leading cryptocurrency Bitcoin (BTC) dropping more than 20% from its June and May highs to as low as $53,500.
The market decline was largely due to the long-awaited trustee overseeing the bankruptcy of Mt. Gox announcing the launch of Bitcoin and Bitcoin Cash. Repaying creditors It has been affected by the infamous hack that resulted in billions of dollars in losses.
As a result, the total cryptocurrency market capitalization fell by over $170 billion in just 24 hours.
Bitcoin repayment and German government sale
Nobuaki Kobayashi, the bankruptcy trustee for Mt. Gox, said: stated Repayments have begun in Bitcoin and Bitcoin Cash through designated cryptocurrency exchanges.
The amounts sent to these exchanges were not disclosed, but data Market intelligence platform Arcam revealed that 47,229 BTC, worth $2.71 billion, was sent to an unknown address.
Kobayashi stressed that the remaining funds will be returned to creditors once “certain conditions” are met, such as verification of registered accounts and completion of discussions with designated creditors. exchange.
The drop in cryptocurrency prices has led to significant liquidation in the derivatives market, with over 229,755 traders liquidating a total of $639.58 million in the past 24 hours. Of this amount, $540.46 million was in long trades, indicating that investors were taking positions in anticipation of long-term asset appreciation.
Additionally, the German government sold approximately 3,000 BTC (worth roughly $175 million), adding to the market pressure. Seized stash 50,000 BTC associated with movie piracy operation Movie2k. Despite the sale, the government still holds over 40,000 BTC, worth over $2 billion.
What past price cycles suggest
Despite the cryptocurrency's price continuing to crash over the past month, industry players and analysts remain optimistic about Bitcoin's future performance.
Despite short-term selling pressure due to the Mt. Gox restructuring, experts expect a rebound towards the end of the year. Crypto data and research firm CCData was suggested Bitcoin's current price cycle has yet to peak and is likely to hit new all-time highs.
Past market cycles show that Bitcoin halving events (reducing the supply of new BTC) are typically preceded by a 12-18 month period of price growth. The most recent halving occurred in April, suggesting further growth is on the way until 2025.
Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told CNBC that he expects Bitcoin to reach $150,000 despite the Mt. Gox issue.
Ethereum launch Exchange-traded funds The introduction of a Bitcoin ETF in the United States and the approval of the first US spot Bitcoin ETF earlier this year have contributed to positive sentiment across the market, signaling potential growth and further mainstream adoption of cryptocurrencies.
At the time of writing, BTC is trading at $55,680, witnessing a significant price drop of 21% over the past month. Market bulls are closely monitoring the $54,480 price level, which is a major support for BTC. This level is crucial as it can prevent further price decline and the risk of a drop below the crucial $50,000 level.
Featured image from DALL-E, chart from TradingView.com
