Article Update: July 5, 4:30 am UTC: This article has been revised following a decline in Bitcoin below $54,000. The update includes fresh details and revised numerical data.
In the wake of Mt. Gox’s recent transfer from its cold wallet, Bitcoin touched a four-month low of $53,499 on Coinbase. The cryptocurrency faced a significant drop around 4:19 am UTC on July 5, marking its lowest point since late February, as indicated by TradingView. Concurrently, there was a notable uptick in cryptocurrency liquidations, totaling $664.5 million over the past 24 hours, which stands as the highest figure in two months, according to CoinGlass reports.
Subsequent to the decline, Bitcoin has seen a modest rise to $54,300, representing a decrease of approximately 7.4% within the last day. Alongside Bitcoin, other prominent cryptocurrencies like Ether (ETH) and Solana (SOL) also observed close to a 10% slump on the same day. ETH notably fell to $2,898.20, dropping below its crucial $3,000 threshold maintained since mid-May, as per insights from Cointelegraph Markets Pro.
Within the past 24 hours, crypto liquidations recorded $584 million from long positions and nearly $82 million from short positions, with long positions in BTC accounting for $222 million of the total. ETH long positions followed closely as the second most liquidated position, amounting to nearly $163 million, according to data from CoinGlass.
Moreover, the current sentiment towards crypto has dipped to its lowest level since January 2023, with the Crypto Fear & Greed Index scoring 29 out of 100 on July 5, indicating market sentiment skewed towards “Fear.”
Traders are expressing concerns over potential selling pressure anticipated from $8.5 billion in Bitcoin creditor reimbursements by the collapsed Mt. Gox exchange. On July 5, the exchange made a significant move by transferring 47,229 BTC, valued at approximately $2.6 billion, to a new address, marking its first major transaction since May.
Germany’s government has also contributed to the selling pressure by selling 7,583 BTC, valued at $419.5 million, since June 19. The government still retains 42,274 BTC, with a valuation of around $2.3 billion.
Analyst Markus Thielen from 10x Research forecasted on July 4 that Bitcoin could potentially drop to as low as $50,000 due to the prevailing selling pressure on the cryptocurrency.