TLDR
Bitcoin’s price dropped below $61,000, triggering over $122 million in long position liquidations.
The price drop coincides with Mt. Gox’s announcement of starting repayments to creditors.
Nearly $300 million in total crypto liquidations occurred in 24 hours, with Bitcoin accounting for $103 million.
Bitcoin’s Relative Strength Index (RSI) reached 28, indicating oversold conditions not seen since August 2023.
The German government’s sale of seized Bitcoin and potential Mt. Gox repayments are contributing to selling pressure.
The cryptocurrency market experienced a significant downturn as Bitcoin’s price fell below the $61,000 mark, leading to a wave of liquidations across the crypto space.
This price drop has raised concerns among investors and traders, with some experts warning that Bitcoin could potentially fall below the critical $60,000 threshold.
As of Monday, June 24, 2024, Bitcoin’s price briefly dipped below $61,000, resulting in the liquidation of over $122 million in leveraged long positions within a 24-hour period.
According to data from CoinGlass, the total crypto liquidations across all assets approached $300 million, with Bitcoin accounting for $103 million of that sum.
The sudden price drop caught many traders off guard, particularly those holding long positions. Out of the nearly 91,000 traders affected, an overwhelming 91.59% were long traders. Ethereum followed Bitcoin in liquidation volumes, with $64 million liquidated, while Solana came in third with $13 million.
Major cryptocurrency exchanges saw significant liquidation volumes, with Binance leading at $102.9 million, followed by OKX at $82 million. Huobi, Bybit, and Bitmex also reported substantial liquidations. The largest single liquidation order occurred on Bitmex, where one trader lost $10 million on the XBTUSDT pair.
This market downturn coincides with several key events that may be contributing to the selling pressure. One significant factor is the announcement from Mt. Gox, the defunct cryptocurrency exchange, that it would begin processing repayments to its creditors starting next week.
Mt. Gox owes approximately $9.4 billion worth of Bitcoin to around 127,000 creditors who have been waiting for over a decade to access their funds.
Eric Balchunas, a senior ETF analyst at Bloomberg, commented on the potential impact of the Mt. Gox repayments, stating, “That’s like over half of all the ETF inflows being negated in one shot. Damn.” This influx of Bitcoin into the market could introduce significant sell pressure, potentially driving prices lower.
Adding to the selling pressure, the German government recently moved nearly 6,500 BTC from a wallet that has held approximately 50,000 BTC since February 2024. This movement, worth over $3 billion at current prices, has raised concerns about potential large-scale selling by government entities.
The price drop has pushed Bitcoin into oversold territory according to the Relative Strength Index (RSI), a popular momentum indicator. Bitcoin’s daily RSI reached 28, signaling oversold conditions not seen since August 2023 when BTC was trading around $26,000. This could potentially indicate that a price bounce may be on the horizon, although market sentiment remains cautious.
Despite the current downturn, it’s worth noting that Bitcoin’s price is still significantly higher than it was a year ago. However, the cryptocurrency has experienced a nearly 12% drop over the past 30 days, reflecting increased volatility and uncertainty in the market.
The impact of this price drop has been felt across the broader cryptocurrency market. Ethereum, the second-largest cryptocurrency by market cap, saw a 5% price drop and nearly $60 million in long liquidations. Bitcoin Cash (BCH), which is also part of the Mt. Gox repayment plan, experienced a more severe 9% drop in the past 24 hours and is down nearly 30% over the past month.
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