Bitcoin Price Plummets Towards $63,000: Prepare for Impact
The recent events in the world of Bitcoin (BTC) have stirred up quite a storm, indicating that challenges are far from over for the leading cryptocurrency. Germany’s decision to offload over $3 billion worth of Bitcoin into the market triggered a wave of fear among investors, causing the BTC price to plummet to $53,000. As the dust settled from this significant sell-off, another looming concern emerged in the form of the Mt. Gox repayments.
The German government made headlines by confiscating approximately 50,000 BTC from a movie piracy website that had been operational since late 2013. Despite Tron founder Justin Sun’s offer to purchase the Bitcoins, the German authorities proceeded with the sale, significantly impacting the market and driving prices down to $53,000. Following the completion of the sell-off, the market gradually began its recovery, but the shadow of the Mt. Gox repayments continued to loom large.
After years of anticipation, the trustee overseeing the Mt. Gox case announced on June 24 that repayments were ready to be initiated. Mt. Gox, which filed for bankruptcy in 2014, left investors waiting for a decade to recoup their investments, which have now multiplied significantly.
The repayment process, however, poses a new threat to the stability of Bitcoin prices. Despite recent efforts that saw Bitcoin reaching $68,000, the movement of BTC from Mt. Gox wallets caused another price dip. Reports indicate that Mt. Gox transferred BTC valued at $2.85 billion to one of its wallets from a cold storage facility, with plans to distribute the funds across four Bitstamp addresses for eventual delivery to investors. The impact of these transactions is vividly reflected in the Bitcoin price chart.
The chart illustrates a sea of red as a result of the aforementioned developments. Coinglass data reveals a bearish sentiment among traders, with an increase in short positions over the past 24 hours. Traders’ lack of confidence in a price surge is evident as they liquidated over $200 million in trades within an 8-hour window, encompassing both short and long positions.
Bitcoin’s price has dipped below key moving averages (MAs) of 20, 50, and 100, finding support only from MA200. A potential death cross between MA 20 and MA100 looms on the horizon, with projections indicating a further decline to $65,400 should this scenario materialize.
In the face of these developments, Bitcoin is currently teetering between the 0.786 Fibonacci level and MA 200 on an hourly chart. Reclaiming the $68,000 threshold appears to be a challenging journey amidst the ongoing market turbulence. The current scenario presents a unique blend of fear and opportunity, marking a phase of mini bear market within the larger bull market landscape.
