Bitcoin Price Falls Below $55k as Mt.Gox Begins Heavy Crypto Distribution

UTC by Steve Muchoki · 3 min read
Bitcoin Price Falls Below $55k as Mt.Gox Begins Heavy Crypto Distribution
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The recent Bitcoin price dip led to forced cryptocurrency liquidations of nearly $700 million, similar to the FTX levels.

On Friday, the defunct cryptocurrency exchange Mt.Gox began the much-anticipated distribution of nearly $9 billion in Bitcoin (BTC) to users. As a result, Bitcoin price plunged more than 8 percent in the past 24 hours to hover around $54K on Friday during the early European session.

The sudden Bitcoin price dump caused heavy crypto liquidations, with most altcoins obliterating this year’s gains.

According to aggregate market data from Coinglass, more than $230 million was liquidated from Bitcoin’s derivative trading, while Ethereum registered over $167 million. In total,  early $700 billion was liquidated from the crypto derivatives trading, with around $590 million involving long traders.

Meanwhile, PerkShield analysis shows that several crypto whales were liquidated in the lending positions. For instance, a crypto whale that used Compound protocol to loan was liquidated more than 173K Ethereum (ETH), worth about $10 million. A similar case was experienced with Bitcoin whales that used the flagship coin as collateral to take loans.

Mt. Gox Begins Bitcoin Repayments

After more than 10 years, defunct cryptocurrency exchange Mt. Gox has begun the distribution of funds to its users. According to the announcement made on Friday, Mt. Gox made repayments in Bitcoin and Bitcoin Cash to some creditors through different crypto exchanges. Meanwhile, Mt. Gox informed the rest of the users to wait for their payments to be processed once all the set conditions are met.

According to on-chain data analysis provided by Arkham Intelligence, Mt. Gox moved more than 47K Bitcoins, worth around $2.71 billion from the cold storage to a new wallet.

The onset of Mt. Gox’s crypto distribution has triggered further bearish sentiments in an already oversold market. Moreover, most of the crypto assets had been trapped in a bearish outlook in the past few weeks.

Whales On a Dumping Spree

As the capital continues to exit the crypto market, down from more than $110 billion in March to about $20 billion, on-chain data shows whales have been on a selling spree. In the past month, Bitcoin whales have offloaded more than 30K coins, worth over $1.8 billion.

As Coinspeaker severally pointed out in the recent past, the demand for US-based spot Bitcoin ETFs has significantly dwindled in the past few weeks fueled by notable economic uncertainty.

Moreover, the US Fed recently indicated that inflation has not slowed fast enough to warrant an interest rate cut later this year.

What Next?

After dropping below the crucial support level around $56k earlier today, Bitcoin price signaled further midterm bearish sentiment. According to most crypto analysts, Bitcoin price could continue with the downward trend towards the next major support level around $52K.

If the Bitcoin buyers fail to defend the support level of around $52K, the next major liquidity range is around $48K.

Bitcoin News, Cryptocurrency News, News
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