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Bitcoin Falls Under $56,000 Amid Mt. Gox Exchange Woes

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Release: 2024-07-10 17:58:50
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(Bloomberg) — Bitcoin is under renewed pressure amid concerns about potential sales of the token by creditors of the bankrupt Mt. Gox exchange, which has begun handing back a stash of about $8 billion of the largest digital asset.

Bitcoin Falls Under ,000 Amid Mt. Gox Exchange Woes

Bitcoin fell as much as 5.2% on Monday amid concerns about potential sales of the token by creditors of the bankrupt Mt. Gox exchange, which has begun handing back a stash of about $8 billion of the largest digital asset.

Most cryptocurrency creditors of Mt. Gox, once the world’s largest Bitcoin exchange, are set to receive their first installment of tokens this week as part of a long-awaited, phased return of tokens to creditors. The exchange was hacked in 2011 and went bankrupt in 2014.

Bitcoin dropped to as low as $53,184 during Asian trading hours, and was trading at $55,290 at 12:13 p.m. in Singapore time, some $19,000 below its March high. Smaller tokens like Ether and XRP also fell.

Sentiment was also negatively affected by signs that the German government would be disposing of seized Bitcoins. At the same time, global markets are cautious as investors digest the results of the French parliamentary elections over the weekend.

Bitcoin’s 25% drop from its all-time high in the first quarter has left some speculators searching charts for patterns that could signal an end to the slide. Tony Sycamore, market analyst at IG Australia Pty, flagged the 200-day moving average. A sustained rise above that level would signal that Friday’s intraday low of around $53,600 was a “capitulation,” he wrote in his note.

If Bitcoin’s pullback continues through Sunday, the token would have fallen for five straight weeks, the longest losing streak since the digital asset bear market of 2022. There is a risk of a “grind lower” in prices until the Federal Reserve begins to ease monetary policy, said Stefan von Haenisch, head of trading at OSK SG Pte.

Earlier in 2024, bitcoin’s year-to-date gains approached 70%, far outpacing traditional assets like stocks. Now, the tech-heavy Nasdaq 100 index is closer to overtaking the falling token. Selloffs typically interrupt bitcoin bull markets, and the longer-term outlook remains positive, said Khushboo Khullar, venture partner at Lightning Ventures, which invests in bitcoin-linked companies.

Surprisingly strong demand for inaugural U.S. bitcoin exchange-traded funds fueled the digital asset’s record-breaking rise earlier this year. Inflows have moderated since then, and one question is whether the current weakness will deter ETF investors. But on Friday, they at least appeared to be buying the dip, recording the strongest net inflows in about a month.

The Mt. Gox spread is unlikely to lead to mass selling by creditors, but the longer Bitcoin stays below $60,000, the greater the chance of a further price correction, said Hayden Hughes, head of crypto investments at family office Evergreen Growth in Singapore.

Some investors are viewing Bitcoin’s dip as temporary, with the highest concentration of bullish bets around a $100,000 strike price, according to Deribit data. This could reflect expectations of looser monetary policy from the Fed in the coming months and the momentum behind pro-crypto Donald Trump’s bid for re-election to the US presidency.

Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for digital asset derivatives, expects cryptocurrencies to be guided by global markets ahead of Fed Chair Jerome Powell’s testimony and U.S. inflation data, which are expected this week and could impact monetary policy forecasts.

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source:kdj.com
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