Bitcoin ( $BTC ) recently fell below $61,000, hitting a new monthly low of $60,993. This sharp decline is attributed to many important factors, each contributing to current market sentiment. Here's a closer look at the reasons behind this downtrend.

Mt.Gox Distribution

A major factor behind Bitcoin's recent price drop is the distribution of 143,000 BTC from Mt. Gox to creditors. Bloomberg reports that the recovery trustee will begin repaying in Bitcoin (BTC) and Bitcoin Cash (BCH) starting in July 2024.

This distribution, which has been long expected, is likely to introduce massive selling pressure into the market, as many creditors may choose to liquidate their assets after receipt. The announcement caused anxiety in the market, leading to panic selling among investors.

Operator sales increased

June saw a significant increase in Bitcoin (BTC) sales from miners. The report indicates that miners sold about 30,000 BTC, worth about $1.8 billion, in the first three weeks of the month.

This increase is largely due to the recent Bitcoin halving, which has reduced profit margins for miners. As a result, many have chosen to liquidate a portion of their reserves to maintain viability and profitability, adding to the selling pressure in the market.

Significant ETF inflows

Another factor contributing to Bitcoin's price drop is the significant withdrawals from Bitcoin ETFs. Since June 15, Bitcoin ETFs have recorded nearly $1 billion in withdrawals.

The trend marks a significant decline in investor interest, with Bitcoin Spot ETFs in the US seeing four consecutive days of net outflows. Fidelity's FBTC fund experienced the largest drawdown, losing $83 million. This trend of constant withdrawals has added downward pressure on Bitcoin.

Implications for the market

These factors have led to spot market sell-offs and massive liquidations, leading to a decline in the price of Bitcoin (BTC). Despite the current downtrend, the long-term outlook for Bitcoin remains optimistic, with many analysts predicting BTC will surpass the $100,000 mark. 

Investors should stay calm and maintain their positions, avoiding selling when the market declines. The current downturn is seen by some as a temporary phase, with the potential for significant gains in the future.