Bitcoin Drops Below $55,000 with "Significant" Selling Predicted for the Next Few Months.
While it recovered some of the losses from the end of last week, Bitcoin fell 6% to $54,600 in weekend trade.
Despite recovering some of its lost above the end of last week, Bitcoin plunged 6% to $54,600 on the weekend. According to Decrypt data, the commodity is at present trading at $55,300. The largest cryptocurrency in the world by market capitalization dropped as low as $54,000 on Friday.
Bitcoin is still facing a number of obstacles, such as the unpredictability of the cryptocurrency market, possible selling compelled is from German government. 127,000 debtors waiting for cryptocurrency payments from the Mt. Gox bankruptcy estate. A quick price rally on Sunday tried to get back above $58,000, but it gave up gains and is now trading at its lowest level since late February.
Based on current values, Germany possesses 39,826 Bitcoin, which is valued at around $2.2 billion, as per an Arkham Insights dashboard. Meanwhile, customers of the now-defunct Japanese marketplace Mt. Gox are still waiting to get paid up to $7.7 billion that they lost in a theft that occurred more than a decade ago.
The defunct exchange plans to distribute approximately 142,000 BTC and 143,000 Bitcoin Cash. "During it is not yet obvious which part of the total delivery will be offered at market, there will be noteworthy selling stress added to Bitcoin," K33 Investigation said of Mt. Gox debtors in its most recent report. Repayments from the exchange are scheduled to start this month.
Crypto markets normally slow down during the summer, but K33 noted that if additional supply enters the thinly traded trading books, traders may experience a rash time than anticipated due to excess supply and negative momentum. Using data from CoinGlass, liquidations throughout the cryptocurrency market reveal that long holdings have lost $175 million. Approximately $210 million has been lost from an additional $35 million in tiny bets.
It comes after a massive sell-off on Thursday and Friday that resulted in $600 million in transactions after Bitcoin briefly fell below $55,000. According to Ryze Labs, a venture finance business focused on Web3, a liquidity crisis is impacting broader markets in Q2 2024. This was reported to Decrypt. The reverse repo amount held by the Federal Reserve increased by more than $200 billion to $664.5 billion last week, suggesting a sizable depletion of liquidity, the Fed said.
According to Ryze Labs, the decrease in China's supply of liquidity since February 2024 may also result in a tightening of global liquidity, which might have an impact on cryptocurrency prices and raise volatility.
