Bitcoin Faces Selling Pressure: Mt. Gox and Miner Sales Impact Market

Fears of Selling Pressure on Bitcoin

Concerns regarding potential selling pressure on bitcoin (BTC) have emerged due to the upcoming distribution of assets by the defunct exchange Mt. Gox, as well as the possibility of miner sales. These factors have pushed the price of the largest cryptocurrency below $59,000 on Thursday, marking the first time since late April.

Mt. Gox Asset Distribution

Mt. Gox, the exchange that suffered a hack in 2014, is set to start repaying assets stolen from clients in July 2024 after multiple postponed deadlines. The repayments will be made in bitcoin and bitcoin cash (BCH), potentially adding selling pressure to both markets.

Market Performance

Bitcoin (BTC) experienced a 3.3% loss in the past 24 hours, with the downward trend beginning shortly after the Tokyo equity markets opened. Other major tokens also declined, with Ether (ETH) dropping 4%, while Solana’s SOL and dogecoin (DOGE) fell by as much as 8%. The CoinDesk 20 (CD20) index, tracking the largest tokens, is down 4.8% in the last 24 hours.

Liquidations and Market Impact

Futures trades anticipating higher prices suffered over $230 million in liquidations within the past 24 hours, according to data from CoinGlass. Notably, products tracking BTC and ETH saw over $60 million in long liquidations each. Crypto exchange Binance accounted for over $110 million in liquidations, the highest among its counterparts.

• Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to insufficient margin requirements.
• This data indicates leverage being washed out from futures products, signaling a potential decrease in price volatility.

Market Outlook

Trading firm QCP Capital forecasted a challenging market environment in the next few months, anticipating a subdued Q3 for BTC due to uncertainties surrounding the Mt. Gox asset release. In a Thursday broadcast on Telegram, QCP Capital expressed caution regarding the market outlook.