Could Bitcoin plummet below 50000 due to Mt Gox repayments

After a brief surge above $71,000 in early June, Bitcoin (BTC) has now experienced its most significant decline of 2024. The cryptocurrency initially broke through its stable, multi-month level near $67,000 and then crashed through multiple support levels.

As of July 5, the price of Bitcoin stood at $54,413 – the lowest it has been since late February.

Despite various possible reasons for BTC’s decline, investors are increasingly focusing on a combination of factors that could lead to significant selling pressure.

For weeks, the German government has been transferring the nearly 50,000 Bitcoin it seized at the beginning of 2024 to crypto exchanges, while cryptocurrencies in U.S. custody have also been on the move.

In the early hours of July 5, Mt. Gox, a Bitcoin exchange that went bankrupt ten years ago, announced it would start repaying its creditors – a development that has been anticipated since May.

The massive movements of nearly 100,000 BTC between German and Mt. Gox cryptocurrency have unsettled investors, but it is likely that the fear of a major sell-off is what triggered the recent crypto market crash.

The sharp decline, which wiped out approximately $130 billion on July 4 and another $100 billion in just one hour on July 5, could be exacerbated by the potential return of BTC to Mt. Gox’s creditors if they decide to sell quickly.

While significant corrections are common in the crypto markets, the current downturn appears particularly risky. Bitcoin has already dropped below several key support levels, entering a potential freefall that could see the coin plummet to or below $50,000.

In recent months, BTC has consistently bounced back from $65,000. Even during the May drop, when Bitcoin briefly fell below $57,000, it quickly recovered. The crucial support levels were evident during the recent decline as Bitcoin initially stabilized near $61,000 and later held above $57,000 for several hours on July 4.

Disclaimer: The information on this website should not be construed as investment advice. Investing in cryptocurrency is speculative and carries risks to your capital.