After the successful launch of spot Ethereum ETF (Exchange Traded Fund) in the United States the overall cryptocurrency market is massively falling. Amid this price drop the world’s biggest crypto asset Bitcoin (BTC) tanked below $64,000 for the first time in six days, likely due to the speculation that Mt. Gox creditors selling their Bitcoin.
Mt. Gox repayment plan
This significant drop has raised concerns among traders and investors who had anticipated Bitcoin forming solid support around the $65,000 mark. However, Bitstamp has confirmed receiving assets related to the Mt. Gox repayment plan. Details on the transfer will be announced later as the exchange begins repaying Bitcoin and Bitcoin Cash to Mt. Gox creditors.
CryptoQuant founder Ki Young Ju reassured investors on July 24, 2024, stating, “The instant dump you worried about didn’t occur. Any price drop would be likely due to market sentiment, not Mt. Gox selling.” Ju added that all global time zones have passed since the Mt. Gox creditors’ repayment, suggesting that the market impact from these repayments has already been absorbed.
After the Mt. Gox creditors' repayment, all global time zones have passed.Kraken's spot #Bitcoin trading volumes and exchange flows are normal.The instant dump you worried about didn't occur. Any price drop would be likely due to market sentiment, not Mt. Gox selling. https://t.co/BKRCIMALsz pic.twitter.com/iZRejMgj83
— Ki Young Ju (@ki_young_ju) July 24, 2024
The recent decline follows a 2.5% decrease in Bitcoin’s price over the past 24 hours, wiping out $24.68 million in long positions, according to CoinGlass data. Currently trading at $64,280, Bitcoin is at risk of dropping below another critical level, according to CoinMarketCap data.
Factors that influence market sentiment
Several analysts believe that the price drop might be influenced by seasonal factors, the launch of a spot Ether ETF, and even political events. Timothy Peterson, founder of Cane Island Alternative Advisors, linked Bitcoin’s underperformance to this time of year, which typically sees weak performance.
“Our research indicates a consistent trend of underperformance from July 22 to Sept. 22,” Peterson added. He also added that this seasonal pattern sets up the frequently occurring “Uptober” that follows, where Bitcoin typically sees a rise in prices.
Charles Edwards, founder of Capriole Investments, suggested that the launch of spot Ether exchange-traded funds (ETFs) on July 23 might also be affecting market sentiment. Edwards remarked, “The ETH ETF launch has been bad for BTC and bad for ETH. ETH has been languishing this entire cycle, and now it’s muddied the waters at the institutional level with the ETF launch.”
Additionally, some traders attribute the decline to a correction after Bitcoin’s recent spike following news related to former US President Donald Trump. Pseudonymous crypto trader Roman said, “This pump was artificial, coming straight from the news that Trump’s assassination attempt failed + soon after swing states had him winning by several points.” Roman added that news-based moves often retrace significantly after the initial spike.
Despite these concerns, overall sentiment remains relatively positive. According to the Crypto Fear & Greed Index, which tracks market sentiment toward Bitcoin and crypto, the score reads “Greed” at 68, up seven points in the past week. This indicates that while there is some fear and uncertainty in the market, many investors remain optimistic about Bitcoin’s long-term prospects.
