Bitcoin Sell-Off Amid Mt. Gox Wallet Transfer

Bitcoin’s (BTC) downward trend continued during the Asian trading session on Friday following a significant move by the defunct exchange Mt. Gox. The leading cryptocurrency saw a decline of over 4% to $53,600, marking its lowest level since February 26, as reported by charting platform TradingView and CoinDesk.

Mt. Gox Wallet Transfer Details

At 00:27 UTC, Mt. Gox initiated a transfer of 47,228 BTC (equivalent to $2.6 billion) from cold storage to a new wallet, as revealed by blockchain analytics firm Arkham Intelligence. This action is believed to be in preparation for the repayment of creditors affected by the 2014 hack, during which assets were stolen from clients of the exchange.

Creditor Repayments and Market Concerns

Following the announcement of impending repayments, including 140,000 BTC ($7.73 billion), 143,000 BCH, and Japanese yen, traders have expressed concerns about potential selling pressure in the market. There are worries that creditors, who have been awaiting reimbursements for nearly a decade, might sell off their coins upon receipt, leading to a significant impact on the market. It is noteworthy that BTC was valued at around $600 at the time of the 2014 hack, compared to its current value exceeding $55,000.

Market Analysis and Reaction

Despite efforts by analysts to reassure market participants that the selling pressure from repayments would be limited, Bitcoin has seen a 10% decline over the past week and a 22% drop in the last four weeks. The recent downtrend has resulted in the breach of the critical support level at $56,500, originating from the lows in May. Additionally, the bears have consolidated their position below the vital 200-day SMA and the bull market trendline.