#Bitcoin , the world's leading cryptocurrency in terms of market cap, experienced a significant decline overnight. It fell 6% to $54,600. This drop comes after an already rough week, with Bitcoin's value falling to $54,000 on Friday. By the end of the weekend, Bitcoin had recovered somewhat, trading above $55,500 but remaining well below recent highs.
Uncertainties in the Market Cause Sales Pressure
The cryptocurrency market is currently facing various negativities. These include market uncertainties, potential selling pressure from major Bitcoin holders, and Mt. Gox bankruptcy estate to creditors.
The German government holds 39,826 BTC, which is worth about $2.2 billion at current prices, and may decide to sell. Additionally, Mt., a defunct Japanese stock exchange. Gox is preparing to distribute approximately 142,000 BTC and 143,000 Bitcoin Cash to its creditors, worth approximately $7.7 billion.
What are the market reactions? What Do Experts Say?
Despite a brief rally attempt on Sunday that saw the Bitcoin price rise above $58,000, the gains failed to sustain, leading to the lowest trading points since late February. Potential sale of Bitcoin by the German government and Mt. Fund distribution from Gox are important factors affecting the market.
Experts suggest that these events could signal a bottom for Bitcoin once the selling pressure subsides. K33 Research found that after refunds began, Mt. Gox underlines that selling pressure from creditors could add significant downward momentum to Bitcoin.
The summer months typically bring a lull in cryptocurrency markets, but additional supply from these sources can result in a busier trading period than usual. This increased supply could flood thinly traded order books and cause further volatility in prices.
Liquidations have also been an important factor in recent price movements. CoinGlass data stated that long positions worth $175 million and short positions worth $35 million were liquidated. Accordingly, there was liquidation of approximately 210 million dollars.
