Bitcoin Price Falls Below $55k as Mt.Gox Begins Heavy Crypto Distribution

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As a researcher with a background in cryptocurrencies and blockchain technology, I have closely followed the recent developments at Mt. Gox and their impact on the crypto market. The sudden distribution of funds by Mt. Gox, which began on Friday, has caused a significant sell-off in Bitcoin and other cryptocurrencies, resulting in heavy liquidations and substantial losses for many traders.

On Friday, the defunct cryptocurrency platform Mt.Gox initiated the long-awaited process of dispersing approximately $9 billion worth of Bitcoin (BTC) to its users. Consequently, the price of Bitcoin dipped by over 8 percent within the last 24 hours and hovered around $54,000 during the early European trading session.

As a researcher studying the cryptocurrency market, I’ve observed that the unexpected drop in Bitcoin’s value led to substantial crypto liquidations. Consequently, most altcoins have wiped out their gains amassed throughout this year.

As a researcher studying the crypto derivatives market, I’ve uncovered some intriguing data from Coinglass. Specifically, over $230 million in Bitcoin derivative positions were liquidated, and Ethereum saw nearly $167 million worth of liquidations. In sum, the total liquidation amount reached approximately $700 billion, with around $590 million affecting long traders.

During the latest market analysis by PerkShield, it has been identified that a number of significant crypto investors, referred to as “whales,” have had their positions in lending liquidated. For example, one such investor who utilized Compound protocol for borrowing was forced to relinquish over 173,000 Ethereum (ETH), equivalent to approximately $10 million. Likewise, Bitcoin whales encountering similar circumstances saw their loans secured by Bitcoin collateral being liquidated.

#PeckShieldAlert #Liquidation A Whale 0x95c5…5365 has been liquidated ~24.64 $WBTC (worth ~$1.41M)
— PeckShieldAlert (@PeckShieldAlert) July 5, 2024

Mt. Gox Begins Bitcoin Repayments

After over a decade, defunct cryptocurrency exchange Mt. Gox has initiated the dispersal of funds to its users. As announced on Friday, Mt. Gox made repayments in Bitcoin and Bitcoin Cash to certain creditors via various crypto exchanges. The remaining users were instructed to be patient as their payments are being processed once all necessary conditions have been fulfilled.

Mt Gox $BTC repayments start
Time to get this over and done with.
— Defi_Maestro ✺ (@Defi_Maestro) July 5, 2024

As a crypto investor, I’ve closely been following the latest developments in the blockchain space, and one intriguing piece of information that recently caught my attention is the significant transaction recorded on the Bitcoin network. According to the on-chain data analysis conducted by Arkham Intelligence, over 47,000 Bitcoins, equivalent to approximately $2.71 billion at current market prices, were moved from Mt. Gox’s cold storage to a new wallet. This transfer is generating buzz within the community as it represents one of the largest transactions ever seen on the Bitcoin network.

As a researcher studying the cryptocurrency market, I’ve observed that the distribution of crypto assets from Mt. Gox has added to the existing bearish sentiment in a market that was already oversold. In the previous weeks, most of these crypto assets had been stuck in a bearish trend.

Whales On a Dumping Spree

With the capital withdrawal from the crypto market causing it to shrink from over $110 billion in March to approximately $20 billion currently, on-chain information reveals that large investors, or “whales,” have been actively selling. In the past month alone, these Bitcoin whales have disposed of over 30,000 coins, equivalent to more than $1.8 billion in value.

According to Coinspeaker’s previous reports, the desire for Bitcoin exchange-traded funds (ETFs) based in the United States has noticeably decreased over the last few weeks due to escalating economic instability.

Additionally, the Federal Reserve in the United States has signaled that inflation hasn’t decelerated sufficiently yet for them to consider reducing interest rates by the end of this year.

What Next?

As a crypto analyst, I’ve observed that Bitcoin’s price dipped below the significant support of around $56,000 today, indicating a more bearish midterm outlook. Following this development, many fellow analysts anticipate that the downward trend may persist, potentially leading us to the next major support level at approximately $52,000.

The good news is $BTC is nowhere near it’s weekly structure low.
The bad news is it’s weekly structure low is at like $40k.
I’ve never been much of a knife catcher, rather wait for strength and react from there.
— Mayne (@Tradermayne) July 5, 2024

Should Bitcoin buyers be unable to protect the $52K support, the next significant area with a high volume of buy orders is approximately $48K.

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2024-07-05 11:12