Bitcoin Plunges to $54,000 as Mt. Gox Moves $2.6 Billion Worth of BTC
Bitcoin's price slumped for the fourth consecutive trading day after Mt. Gox moved a sizable amount of BTC to a new wallet, possibly readying for the proposed repayment.
According to CoinMarketCap data, the flagship cryptocurrency dropped by over 4% to $53,600, the lowest level since February 26. This decline could be attributed to fear of potential sell pressure on Bitcoin due to the massive inflow of BTC from Mt. Gox's repayment.
An update from Arkham Intelligence revealed that Mt. Gox moved 47,228 BTC coins worth $2.6 billion from cold storage to a new wallet address at 12:27 AM UTC.
This transfer is likely in preparation for the repayment plan, which will reimburse 140,000 BTC worth $7.73 billion, 143,000 BCH, and the Japanese yen to creditors.
The Mt. Gox transfers have created a bearish response from investors, likely contributing to BTC's price decline. Some investors believe creditors will be keen on disposing of their BTC tokens, leading to further price decline.
However, the Head of Presto Research, Peter Chung, disagrees with these arguments. According to Chung, the Mt. Gox rehabilitation shifts the supply and demand dynamics of Bitcoin and Bitcoin Cash.
He believes that the selling pressure for Bitcoin Cash will be four times higher than Bitcoin's. Bitcoiners. Moreover, most Mt. Gox creditors are wealthy and long-term holders; hence, only a fraction of BTC will be sold.
Conversely, Chung predicts a 100% short-term sellout for Bitcoin Cash. He is optimistic that the repayments scheduled between July 1 and October 31 will only moderately affect prices.
Analyst Gargoyle Shares Insights on Factors Influencing BTC PriceAlso, Gargoyle, a seasoned influencer and analyst, analyzed the current state of the crypto market, pointing out some factors responsible for Bitcoin's downturn.
He noted that BTC had lost 20% in the past week, dropping rapidly from $71,000 to $57,000.Gargoyle identified the Mt. Gox repayments as a pressure point on Bitcoin's price as it will distribute 0.68% of BTC's total supply among the creditors.
The analyst also believes outflows from Spot Bitcoin ETFs affected prices since 5% of BTC's total supply is in the ETFs. Additionally, the Bitcoin halving on April 20 affected miners as some sold BTC tokens to offset operational costs, exerting bearish pressure on Bitcoin.
Gargoyle also identified the US interest rates as another factor contributing to the bearish market. He highlighted that lower rates make high-risk investments like cryptocurrencies more attractive, but the Fed is unwilling to cut rates.
Moreover, the German government's recent sale of 2,700 BTC BTC tokens in the last two weeks adds selling pressure to the market.
Nevertheless, Gargoyle notes that major investors have refused to sell their BTC despite the bearish factors. Marathon Digital Holdings, the largest miner, has not sold its BTC assets despite its urgent need for capital.
Meanwhile, according to Santiment data, investors' interest in buying the dip has increased, signaling a potential trend reversal.
The analyst also identified the US elections as another critical factor in price boosts in the crypto market. If Trump's pro-crypto stance is victorious, crypto regulations will likely become favorable.Gargoyle concluded his analysis by affirming his belief in Bitcoin as an excellent long-term investment.
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