The cryptocurrency market experienced a significant downturn on July 5th, with Bitcoin taking the brunt of the bearish sentiment. The price of Bitcoin plummeted to a four-month low of $53,499 on major exchange Coinbase, following news of a large Bitcoin transfer from the defunct Mt. Gox exchange.
According to TradingView data, Bitcoin’s sharp decline began around 4:19 am UTC, marking its lowest point since late February. This sudden price drop triggered a surge in cryptocurrency liquidations, with CoinGlass reporting a 24-hour total of $664.5 million – the highest level in two months. While Bitcoin has shown slight recovery to $54,300, it still reflects a concerning 7.4% decline over the past day.
Bloodbath Across Cryptocurrencies
The selling pressure wasn’t limited to Bitcoin. Other prominent cryptocurrencies, including Ethereum (Ether) and Solana, also witnessed significant losses. Ether dipped below the crucial $3,000 support level it had maintained since mid-May, falling to $2,898 as per Cointelegraph Markets Pro data. Market data further indicates that liquidations over the past 24 hours encompassed $584 million in long positions (bets on rising prices) and nearly $82 million in short positions (bets on falling prices). Notably, long Bitcoin positions accounted for $222 million of the total liquidations.
The current market sentiment reflects a palpable sense of fear. The Crypto Fear and Greed Index, a gauge of investor sentiment, plunged to a score of 29 out of 100 on July 5th. This reading, the lowest since January 2023, signifies “Fear” as the dominant market emotion.
The primary source of investor anxiety appears to be the anticipated sell-off linked to the $8.5 billion in Bitcoin slated for creditor repayments by the collapsed Mt. Gox exchange. Adding fuel to the fire, Mt. Gox initiated its first major transaction since May on July 5th, transferring a substantial 47,229 BTC (worth approximately $2.6 billion) to a new address.
Further exacerbating the market sell-off, the German government has been actively selling its Bitcoin holdings. Since June 19th, they have liquidated 7,583 BTC, valued at roughly $419.5 million. This leaves them with approximately $2.3 billion worth of remaining Bitcoin holdings (42,274 BTC).
Adding to the bearish sentiment, a recent analysis by 10x Research analyst Markus Thielen suggests a potential further drop for Bitcoin. Thielen predicts Bitcoin could fall as low as $50,000 due to the ongoing selling pressure within the cryptocurrency market.
The confluence of factors, including Mt. Gox’s upcoming creditor repayments, the German government’s Bitcoin sales, and broader market fear, has triggered a significant decline in Bitcoin’s price and a wider cryptocurrency market sell-off. As analysts predict further potential dips, only time will tell how low Bitcoin will go and how long this bearish trend will persist.