BTC Price Plunges to May Lows, Triggering $193M in Liquidations as Mt. Gox Repayments Loom

BTC's price plunged to prices unrecorded since May, falling below $57,000 on July 4 to go as low as $55,300.

The price of BTC dropped to levels not seen since May, falling below the $57,000 mark on July 4 and reaching a low of $55,300. According to CoinGlass, this price movement resulted in the liquidation of over $193 million in leveraged BTC contracts over the past 24 hours.

Out of that total, $154 million were longs, which are contracts betting on BTC’s upward price movements, and $39.06 million were shorts, which are contracts betting on the asset’s downtrends.

The liquidations occurred as BTC prices approached the $55,000 level three days after rallying to around $62,000 on July 1. Now, there are concerns that BTC could drop as low as $50,000, which many analysts believe will happen.

Despite the price drop, BTC ETF participants did not panic and liquidate their holdings en masse. As BTC prices dropped a few days ago, net BTC ETF outflows only amounted to $20.45 million on July 3, which is significantly lower than the hundreds of millions liquidated in the latter weeks of June.

However, this does not mean that outflows may not occur in the coming days, as most investors will be returning to their desks after the July 4 Independence Day holiday and could decide to mass exit their positions then.

If BTC’s price fails to recover, then BTC ETF investors may decide to do just that. Currently, there is a lot of selling pressure on BTC due to the upcoming Mt. Gox repayments, which are expected to take place this month.

Anticipation of the repayments, which will release 140,000 bitcoins worth $9.4 billion, is causing BTC to drop massively in value. Mt. Gox conducted test transfers of only $25, which sent the market into panic mode.

The German government-associated wallet is also not helping the situation by selling thousands of BTCs. As it sells thousands of BTCs, other holders will inevitably decide to liquidate their holdings to take profits, which will lead to dipping asset prices.

However, analysts believe that BTC will eventually recover after sliding down to the $50,000 mark.

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