Bitcoin Drops to Four-Month Low as Mt Gox Exchange Collapse Spooks Traders
- WBOYOriginal
- 2024-07-11 15:08:29432browse
Bitcoin sank to a four-month low on Friday, breaking below technical supports as traders anticipated the dumping of long-lost tokens from a defunct Japanese exchange and further selling by momentum-spooked leveraged players.
Bitcoin price fell sharply on Friday morning, dropping to its lowest level in four months.
The world’s largest cryptocurrency slid more than 8% to $53,523, falling below a key technical support level around $55,000 and reaching its lowest level since late February, according to a report by Reuters.
Bitcoin is now on track to post a loss of about 12% for the week, even as many of the risk-sensitive assets that it tends to track, such as the Nasdaq, have gained. Ether price also dropped sharply, falling 9% to $2,841, reaching an over two-month low.
Media reports this week said that Mt Gox, which was the world’s leading cryptocurrency exchange before it collapsed a decade ago, may start returning bitcoin to creditors, who are seen as likely sellers since the token’s worth was only hundreds of dollars in 2014.
“The selling pressure is still related to creditor selling from the failed Mt Gox exchange,” Tony Sycamore, a market analyst at IG, said.
“However, the acceleration to the downside suggests the market is trying to get ahead of the creditor flows.”
Analysts have also pointed to worries over the possibility of Joe Biden being replaced as the Democrats’ presidential nominee by someone less pro-crypto after a shaky debate performance with rival candidate Donald Trump.
Bitcoin had a strong start to the year after the launch of exchange-traded funds in the US, propelling it to a record $73,803.25 in mid-March. However, it has since struggled.
“With an asset that has been rangebound for quite a while and recently in the lower end of that range, there are plenty of margined positions,” said Justin D’Anethan at digital assets market maker Keyrock, which are forced to sell as prices fall.
“This of course creates a cascading effect, pushing prices further down than it might in a market with less leverage.”
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