The crypto market saw a major price drop today. As we witnessed, Bitcoin (BTC) led the decline. Many analysts predicted the BTC price won’t go below $56-58k in this bull cycle, but they were wrong; Bitcoin is now trading well-below $55k.
At the same time, Ethereum lost $3k area. But, what’s driving this crypto prices downturn?
A major reason for the drop in price appears to be the movement of a large amount of Bitcoin by Mt. Gox.
Mt. Gox moves 47,228 BTC
According to data from blockchain intelligence firm Arkham, Mt. Gox transferred 47,228 BTC (valued at approximately $2.71 billion) from cold storage to a new wallet.
BREAKINGMt Gox moves 47,228 BTC ($2.71 billion dollars) from cold storage to a new wallet. pic.twitter.com/3ZdSlC1IX2
— Arkham (@ArkhamIntel) July 5, 2024
This substantial movement has reignited concerns about potential market pressure from Mt. Gox’s creditors. The exchange which closed down because of a hack is now preparing to repay its creditors. The prospect of these creditors potentially selling their received Bitcoin has created uncertainty in the market.
Other Factors Contributing to Crypto Prices Crash
The Mt. Gox situation is just one factor. Several other factors are also causing the current market dump, according to analyst Gargoyle:
People are taking their money out of Bitcoin ETFs.
Since the Bitcoin halving in April, miners are getting fewer rewards, so they’re selling their Bitcoin.
The US central bank is keeping interest rates high. This makes risky investments like Bitcoin less attractive.
The German government is selling its Bitcoin.
Because of all this, Bitcoin’s price has dropped a lot. In the past week, it went from $63,000 to $57,000. In just one day, it dropped to a low of $53,680.23 and a high of $59,006.00.
5/ GermanyThe German government owns a significant amount of BTC and has started selling its assets.According to Arkham, the German government recently transferred 400 BTC to the exchanges Bitstamp, Coinbase, and Kraken.In total, 2,700 BTC have been moved to exchanges from… pic.twitter.com/fcxtTDD6kr
— Gargoyle (@degargoyle) July 4, 2024
The total market cap has fallen to $1.99 trillion. This is over 8% decrease in the last 24 hours. This sell-off has resulted in millions of liquidations. Coinglass data shows that crypto liquidations hit $678 million in the last 24 hours.
Read more: Cardano (ADA) Poised for Breakout? Analyst Spots Bullish Pattern Mirroring Bitcoin’s Pre-Halving Cycles
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