Ibrahim Ajibade
Bitcoin price dropped below the $55,000 mark on July 5 as markets reacted negatively to recent developments surrounding expected $9 billion in BTC payouts to Mt. Gox creditors.
Bitcoin Price Wobbles as Mt. Gox Moves $2.7 Billion
Bitcoin’s price has tumbled to its lowest point since late February, breaking through critical support levels. The sell-off was exacerbated early Friday when the now-defunct Mt. Gox exchange transferred 47,228 BTC from cold storage to a new address, likely in preparation for creditor repayments.
The pioneer cryptocurrency dropped over 4% as it fell below $53,600 on Friday, July 5. As a result, BTC has now hit levels not seen since February 26, according to the TradingView chart above. At 00:27 UTC, Mt. Gox moved a sizable amount of BTC, valued at $2.6 billion, signaling the beginning of asset distribution to creditors affected by the 2014 hack.
The announced Mt. Gox payouts, which includes 140,000 BTC, 143,000 BCH, and Japanese yen, have stirred negative sentiment among traders about a potential market supply shock if majority of the creditors opt to sell-off their coins immediately.
More so, back when the funds were seized in 2014, BTC was priced at roughly $600, compared to over $55,000 today. This sparks fears that majority of the creditors will opt to sell large swathes of their assets, to lock-in profits in the days ahead.
The bearish headwinds form the Mt. Gox payout FUD (Fear, Uncertainty and Doubt) has sparked massive sell-off in the spot markets, as well as rapid liquidations in the BTC derivatives markets.
Despite some analysts attempting to soothe investor worries by suggesting the selling impact may be limited, Bitcoin has already slid 10% in the past week and 22% over the past month, reflecting the market’s bearish outlook.
Bitcoin Price Forecast: Bulls Eyeing $60k Rebound
The recent dip in Bitcoin’s price to $55,000 has attracted new entrants looking to capitalize on the pullback. As of July 5, BTC is hovering around $55,462.78, showing signs of consolidation.
The 200-day SMA at $58,540.84 serves as a critical level that Bitcoin needs to reclaim to signal a bullish reversal. The Bollinger Bands indicate increased volatility, suggesting that a significant move is imminent.
Key support is seen around the $55,000 mark, which aligns with the lower Bollinger Band and provides a robust foundation. If this level holds, we could see a rebound towards the mid-$60,000s, with initial resistance at $58,540.84 (200-day SMA) and stronger resistance around $62,270.11 (upper Bollinger Band). The price action within this range will be crucial in determining the next trend direction.
Despite the recent downturn, the overall market sentiment remains cautiously optimistic. The RSI is approaching oversold territory, indicating potential for a bullish reversal. If buying pressure increases, Bitcoin could quickly reclaim $58,540.84 and target the $60,000 psychological level. A break above this could open the doors to higher targets, potentially towards $62,000 and beyond.
In summary, while Bitcoin’s recent dip poses challenges, it also presents opportunities for new investors. Holding above $55,000 is critical, and a successful push past $58,540.84 could set the stage for a bullish rebound toward $60,000 and higher.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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