Bitcoin (BTC) Rebounds to $57K, Mt. Gox Reimbursements Shake Up the Market

During the European morning, bitcoin recovered from a slump that had seen it sink to just above $54,000. BTC subsequently recovered to climb above $58,000 and is currently trading at around $57,200, down about 0.4% in the last 24 hours.

First Mover Americas: BTC Rebounds to $57K, Long Liquidations Hit $175M

Chart of the Day: BTC Price Floor Weakens After a Wave of Selling Pressure

The latest price moves in crypto markets in context for July 8, 2024.

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During the European morning, bitcoin recovered from a slump that had seen it sink to just above $54,000. BTC subsequently recovered to climb above $58,000 and is currently trading at around $57,200, up about 0.4% in the last 24 hours. The CoinDesk 20 Index meanwhile has climbed 0.33, after also crashing during the Asian morning. Data from CoinGlass shows there have been $175 million in long liquidations over the last 24 hours after bitcoin lost 13% last week, a decline comparable to that it experienced in the aftermath of FTX's collapse.

Bitcoin’s price floor appears to have weakened after a wave of selling pressure, a development that could herald further declines in the cryptocurrency.

On-chain data shows that an old bitcoin wallet, which some speculate belongs to Germany's bitcoin sales and another to Mt. Gox's reimbursements, have recently been active again, and the drama may not be over yet. The wallets, which together hold 89,652 BTC (about $5 billion), have been slowly emptying over the last few months. The stash, a potential source of selling pressure, represents nearly 9% of BTC's 24-hour trading volume of $25.3 billion, suggesting further price turbulence.

Early this year, the German Federal Criminal Police Office seized 49,857 BTC from the operators of Movie2k.to, a privacy website that was last active in 2013. The authorities planned to auction off the bitcoin, which was valued at $3.5 billion at the time, to cover the costs of the investigation and compensate the victims of the site's copyright infringements. However, the government decided to hold onto the cryptocurrency instead, as liquidating such a large amount of bitcoin would have depressed the market price and impacted the traders who had purchased the coins from the original owners.

Since mid-June, the government has liquidated over 10,000 BTC, putting downward pressure on the cryptocurrency's going market rate. The move comes as the authorities are under increasing pressure to sell the bitcoin and use the proceeds to fund other government initiatives.

In other news, bitcoin mining was more profitable in June than May as the price of the cryptocurrency rose 2% and the network hashrate dropped by 5%, and as the market adjusted to the effects of the halving, investment bank Jefferies said in a research report on Monday.

“June was a month of modest recovery from the immediate impacts of the halving that were most pronounced in May,” analyst Jonathan Petersen wrote. Hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain and is a proxy for competition in the industry and mining difficulty. The quadrennial reward halving, which occurred in April, slowed the rate of growth in bitcoin supply as miners' rewards were cut by 50%.

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- Omkar Godbole

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