As a seasoned crypto investor with a fair share of experience in this volatile market, I can’t help but feel a pang of familiar unease as the latest wave of price declines washes over us. The news of Mt. Gox beginning payments to creditors in Bitcoin and Bitcoin Cash has only intensified the downside risk for Bitcoin and altcoins.
The cryptocurrency market has stayed relatively subdued over the past two weeks. Bitcoin is approaching the $60,000 mark, having come down from its previous high of $70,000 following the publication of May’s Consumer Price Index data in the United States. This data indicated that inflation was continuing to decelerate.
With Bitcoin and other cryptocurrencies continuing their downturn in search of stability, investors are tallying up their losses. The selling pressure is expected to intensify as Mt. Gox, the defunct exchange, prepares to distribute compensation to creditors using Bitcoin and Bitcoin Cash (BCH).
Bitcoin Price Downside Risk Intensifies As Mt. GOX Schedules Payments
In the early days of Bitcoin trading, around 2010, Mt Gox emerged as a leading exchange, processing over 70% of transactions. However, by 2014, this prominent platform encountered significant issues. It was later disclosed that hundreds of thousands of Bitcoins had been misplaced due to security breaches and management mishaps, ultimately resulting in its closure.
The early cryptocurrency market was dramatically affected by the event, resulting in substantial losses for many investors. After a ten-year bankruptcy proceedings, Mt Gox Co., Ltd (the Rehabilitation Debtor) and Nobuaki Kobayashi Attorney-at-law (the Rehabilitation Trustee) have initiated payments which will be distributed in Bitcoin and Bitcoin Cash.
“The trustee has finished processing and confirming all necessary information for initiating the payouts, as mentioned in their announcement on June 24th.”
The anticipated commencement of payments on July 2 instilled apprehension amongst crypto investors, with concerns over increased market turbulence. Factors external to the cryptocurrency sphere, such as central bank rate reductions and investor fatigue, have been posing significant challenges for Bitcoin and other altcoins.
According to CoinGecko’s data, Bitcoin is currently priced at $61,038, representing a 5% decrease in the last 24 hours and 7% decline in the past week. In contrast, Ethereum has also experienced significant losses, with its price dropping by 5% to reach $3,315 on Monday. Consequently, the total market capitalization has dropped from $2.785 trillion as of June 5 to $2.359 trillion due to these rampant losses.
Bitcoin Faces Unprecedented Risk As Downtrend Points To $46,000
At a support level of $60,000, Bitcoin’s price needs a significant bounce for an anticipated trend change. However, if Bitcoin forms a double top pattern around $70,000, the risk of a substantial drop to around $46,000 becomes heightened.
If the double-top pattern, visible on the daily chart and currently around $60,000, were to break, it could trigger a more significant trend reversal. Additionally, a death cross formation on the same chart – where the short-term moving average crosses below the long-term one – suggests further potential for price declines. The emergence of this pattern is often indicative of a prolonged downtrend.
As a crypto investor, I’ve noticed that the recent price drop in Bitcoin aligns with an oversold Relative Strength Index (RSI) reading below 30. This means that the selling pressure has been quite strong and the market is considered oversold. At this point, the bulls face a limited opportunity to halt the declines at $60,000. However, if Bitcoin fails to recover above that level, it may trigger an extended spiral leading us towards the double-top pattern target of around $46,000.
Several elements could contribute to Bitcoin’s resurgence. One of these factors is the imminent launch of Ethereum’s ETF, which could improve market sentiment. If investors regain their faith in buying dips and confidence returns, Bitcoin will likely experience a significant trend reversal, propelling its price above $70,000 and establishing new record highs.
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2024-06-24 15:52