Bitcoin Faces Increased Selling Pressure Amid Mt. Gox Repayments and Market Downturn

  • News of repayments in Bitcoin and Bitcoin Cash is expected to exert further downward pressure on these assets.
  • The latest metrics and futures data suggest a continuation of the bearish trend into the next week.
  • Bitcoin [BTC] has been under intense selling pressure, plummeting from $71.9k on June 6th to $61.4k currently. The asset briefly dipped to $60.5k following news from the defunct exchange Mt. Gox.

Bitcoin and Bitcoin Cash face potential downward pressure due to impending repayments; market metrics and futures hint at further losses.

Impact of Repayments on Bitcoin Performance

The now-defunct Mt. Gox exchange, which was once the world’s leading Bitcoin trading platform, experienced a massive hack in 2014, losing approximately 740,000 BTC—valued at around $15 billion today. After years of delayed deadlines, a statement on June 24th revealed that repayments, set to be made in Bitcoin and Bitcoin Cash, would commence in July 2024.

Rehabilitation Trustee Nobuaki Kobayashi affirmed that these repayments could intensify selling pressure on the market for these two assets. An COINOTAG report in late May identified the movement of 140,000 BTC, worth $9.4 billion at that time. Although this did not immediately impact prices, it contributed to BTC forming a local top at just under $72k a week later.

Metrics Indicating Possible End of Correction

According to crypto analyst Axel Adler, the short-term holders’ (STH) spent output profit ratio (SOPR) metric’s 90-day moving average (90DMA) was slightly above 1. Adler noted that, similar to the 2016 cycle, Bitcoin might continue its correction until this metric dips below 1, after which a bullish trend reversal could be more probable. Nevertheless, this process will take time, and investors may experience further losses or consolidation.

Another analyst, Ali Martinez, noted the RSI was once more in the oversold territory below the 30 mark. Historically, this has led to significant price recoveries. However, this does not guarantee the end of the current downtrend or an imminent uptrend.

Analyzing BTC Futures Market Data

Data from Coinalyze indicated a steady decline in the spot CVD over the past month, illustrating continuous selling pressure in the spot market. Following a rise in Open Interest in early June, it began to decline after the first week, pointing to a bearish sentiment over the preceding three weeks.

The past 24 hours saw a spike in long liquidations, amounting to nearly $75 million in a 12-hour span on June 24th, intensifying the bearish outlook. The long/short accounts ratio stood at 2.46, indicating a predominance of long positions compared to short ones.

Conclusion

The anticipation of Bitcoin repayments is compounding bearish sentiment, with the market metrics and futures data forecasting further losses. While a potential trend reversal could be on the horizon, it is likely to be preceded by more corrections and consolidations along with a possible dip below the $60k mark. Investors are advised to exercise caution and stay informed on market developments to navigate this volatile period effectively.

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Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
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