Bitcoin’s price recently fell below $59,000 due to concerns about potential sell pressure from Mt. Gox repayments and potential miner sales. This drop also affected other major cryptocurrencies such as ether and Solana’s SOL. The trading firm QCP Capital predicts a quiet market in the next quarter due to uncertainty surrounding the release of Mt. Gox’s bitcoin supply.
Mt. Gox, a defunct exchange, is set to begin distributing assets stolen from clients in a 2014 hack in July 2024. The repayments will be made in bitcoin and bitcoin cash (BCH), which could create additional selling pressure in both markets. Bitcoin lost 3.3% in the last 24 hours, with the sell-off starting shortly after Tokyo equity markets opened. Other major tokens like Ether (ETH), Solana’s SOL, and dogecoin (DOGE) also experienced declines.
The CoinDesk 20 (CD20), a liquid index tracking the largest tokens, is down 4.8% in the past day. Futures trades betting on higher prices faced over $230 million in liquidations, with BTC and ETH futures seeing over $60 million each in long liquidations. Products tracking DOGE, SOL, XRP, and pepe coin (PEPE) recorded at least $4 million in losses.
For long traders, these liquidations were the highest since late June. Binance led the way in liquidations, with over $110 million in losses. Liquidations happen when an exchange closes a trader’s leveraged position due to a loss of initial margin. This occurs when a trader is unable to meet the margin requirements for a leveraged position.
This data can be useful for traders as it indicates leverage being washed out from popular futures products, suggesting a short-term decrease in price volatility. QCP Capital expressed their expectation of a quiet market in the coming months due to uncertainty surrounding the Mt. Gox release. They anticipate a subdued Q3 for BTC as a result.
Overall, the cryptocurrency market is facing challenges from various factors, including potential sell pressure from Mt. Gox repayments and miner sales. Traders are advised to stay informed and cautious as the market continues to evolve.