- Bitcoin price fell below $57,000, reaching a low of $56,950 in early European trading hours on Thursday, representing a drop below the crucial 200-day moving average of $58,492.
- The price drop can be attributed to the German government’s transfer of approximately 1,300 BTC worth $75.53 million to major cryptocurrency exchanges and anticipated Mt. Gox repayments expected to commence in early July.
- The influx of a significant amount of Bitcoin into circulation from the Mt. Gox repayments and the German government’s Bitcoin sales could exert further downward pressure on the market.
The price of Bitcoin has fallen sharply in recent days, dropping below the $57,000 level to reach a low of $56,950. This decline comes amid concerning developments in the market that have exacerbated selling pressure.
German Government’s BTC Transfer to Exchanges
The German government recently transferred approximately 1,300 BTC valued at $75.53 million to major cryptocurrency exchanges Bitstamp, Coinbase, and Kraken. This marks the largest transfer to centralized exchanges in recent times and has likely fueled increased selling.
Anticipated Mt. Gox Repayments
The long-awaited Mt. Gox repayments are expected to begin in early July. Wallets linked to Mt. Gox made minor test Bitcoin transfers earlier today, in preparation for substantial customer repayments this month. The influx of significant amounts of Bitcoin into circulation from Mt. Gox could place further downward pressure on the market.
Liquidations in Derivatives Market
The price decline triggered a wave of liquidations in the derivatives market. According to CoinGlass, Bitcoin liquidations have reached $100.4 million, with over $86 million worth of leveraged long positions being forcibly closed.
Analysts’ Views on Continued Weakness
According to 10x Research, $60,000 was a key support level for Bitcoin miners and spot ETF buyers. Breaking this could cause a further sharp decline to the low $50,000s. Bitfinex analysts also noted that selling could continue from Mt. Gox depositors and the German Federal Criminal Police Office.
The recent downturn shows Bitcoin decoupling from equities as longtime holders resume selling. While the market remains uncertain, analysts will be closely monitoring price action and developments around the Mt. Gox repayments.
