According to Cointelegraph: Bitcoin (BTC) has been in a downtrend since the beginning of June, struggling to gain upward momentum despite positive ETF inflows. The Bitcoin price fell below the $60,000 psychological mark on July 3, threatening to prolong the current price consolidation as Mt. Gox potentially starts releasing $9 billion worth of BTC.
Main Takeaways:
1. Price Decline:
- Recent Drop: Bitcoin fell 4.2% in the 24 hours leading up to 10:33 am UTC on July 3, reaching a local bottom of $59,600.
- Weekly Performance: The cryptocurrency is down 1.8% on the weekly chart, according to CoinMarketCap.
- Quarterly Decline: Bitcoin has logged a nearly 18% decline during the second quarter of 2024.
2. Mt. Gox Repayments:
- Potential Impact: The decline below $60,000 may be attributed to the potential start of Mt. Gox creditor repayments, expected in early July.
- Bitcoin Transfer Volume: A significant volume of Bitcoin, last moved during the past seven to 10 years, has been transferred on-chain, suggesting Mt. Gox distributions are beginning.
- Creditor Repayments: More than $9.4 billion worth of Bitcoin is owed to approximately 127,000 Mt. Gox creditors.
3. Whale Activity:
- Large Sale: An unknown whale sold $180 million worth of Bitcoin within three minutes, contributing to the price decline.
- Binance Deposit: Another whale deposited 1,723 BTC worth over $168 million to Binance, indicating a potential sell-off.
Detailed Analysis:
Price Decline and Market Sentiment:
- Psychological Support: The $60,000 mark has been a critical psychological support level for Bitcoin. Falling below this level could signal a longer price correction.
- Investor Expectations: Investors have been eagerly anticipating a breakout above the $70,000 mark to pave the way toward new all-time highs. Losing the $60,000 support could dampen these expectations.
Mt. Gox Repayments:
- Historical Context: Mt. Gox, a defunct crypto exchange, has been in the process of repaying creditors who have been waiting for over 10 years to recover their funds.
- On-Chain Activity: Charles Edwards, founder of Capriole Investments, noted an enormous sum of Bitcoin moved on-chain, 10 times more than previous highs, suggesting Mt. Gox distributions are underway.
- Market Impact: The release of $9 billion worth of Bitcoin could lead to significant selling pressure as creditors may cash out their decade-old profits.
Whale Activity:
- Large Sell Orders: The sale of $180 million worth of Bitcoin within three minutes by an unknown whale created substantial downward pressure on the price.
- Binance Deposits: The transfer of 1,723 BTC to Binance by another whale suggests an intention to sell, further contributing to the price decline.
Potential Absorption by ETFs
- Institutional Inflows: Despite the potential selling pressure from Mt. Gox repayments, institutional inflows to U.S.-based spot Bitcoin ETFs could absorb some of the impact.
- ETF Holdings: Since their launch in January, these ETFs have amassed over $52.5 billion worth of BTC, according to Dune.
Bitcoin's recent decline below the $60,000 mark can be attributed to a combination of factors, including the potential start of Mt. Gox creditor repayments and significant whale activity. The release of $9 billion worth of Bitcoin from Mt. Gox could lead to increased selling pressure, while large sell orders from whales have already contributed to the price drop. However, institutional inflows to Bitcoin ETFs may help absorb some of the selling pressure. As the market navigates these dynamics, the $60,000 level remains a critical support to watch, with potential implications for Bitcoin's price trajectory in the coming months.