My Dear Readers,
In the past 24 hours, Bitcoin (BTC) experienced a sharp decline, with $222 million in long positions liquidated. The price of BTC hit its lowest point since February, dropping to $53,499 on Coinbase.
This decline coincided with news of the latest cold wallet transfer by Mt. Gox.
Market Dynamics and Liquidations
The downturn began around July 5 at 4:19 am UTC, marking Bitcoin's lowest level since late February, according to TradingView. During this period, total crypto liquidations reached $664.5 million, the highest in two months, as reported by CoinGlass. BTC has since slightly recovered to $54,300, reflecting a 7.4% drop over the last 24 hours.
Broader Crypto Impact
Other major cryptocurrencies also faced significant declines. Ether (ETH) dropped nearly 10%, falling to $2,898, below the critical $3,000 level it had maintained since mid-May. Solana (SOL) and other highly traded cryptocurrencies saw similar drops.
Detailed Liquidation Breakdown
Over the past 24 hours, crypto liquidations included $584 million in long positions and nearly $82 million in short positions. Long BTC positions accounted for $222 million of the total liquidations.
Market sentiment towards cryptocurrencies has reached its lowest point since January 2023. The Crypto Fear & Greed Index reflected a score of 29 out of 100 on July 5, indicating a market experiencing "Fear."
Mt. Gox and Market Pressure
Traders are concerned about potential sell pressure due to the $8.5 billion in Bitcoin creditor paybacks by the defunct crypto exchange Mt. Gox. On July 5, the exchange transferred 47,229 BTC, worth approximately $2.6 billion, to a new address. This was its first significant move since May.
Additional Pressure from Germany
Adding to the selling pressure, the German government has sold 7,583 BTC worth $419.5 million since June 19. Germany still holds 42,274 BTC, valued at around $2.3 billion.
On July 4, 10x Research analyst Markus Thielen predicted that Bitcoin could fall as low as $50,000 due to the ongoing sell pressure.
The global crypto market cap has decreased by 8.52% over the last day, now standing at $1.99 trillion.
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