Why is Bitcoin down today? BTC crushes to $58K

The largest crypto, Bitcoin, dropped below $59,000 on Thursday, marking its lowest point since late April. This decline was driven by concerns over potential selling pressure from the defunct exchange Mt. Gox and potential miner sales. However, analysts have differing opinions regarding the potential impact of the repayments on Bitcoin.

Also Read: Bitcoin loses June gains – Will BTC fall under $60K?

As of this writing, Bitcoin’s (BTC) value is $58,817.40. This represents a slight decrease of 0.1% compared to an hour ago and a 3.7% decline since yesterday. The current value of BTC is 3.2% lower than its value a week ago.

Bitcoin markets tumble 

After multiple postponements, Mt. Gox has finally announced that it will begin returning the assets stolen from its clients during the 2014 hack in July 2024. The repayments will be made in cryptocurrencies, specifically BTC and Bitcoin cash (BCH), which could potentially impact the selling pressure in both markets.

According to CoinGecko data, the price of BTC fell by 3.2% in the last 24 hours. This decline in value started soon after the Asian markets opened for trading. 

In the past week, the daily exchange rate of BTC to USD experienced fluctuations, reaching a peak of $62,820 on Tuesday and a low of $58,817 on Thursday. Last week, the price of BTC in USD experienced a significant 24-hour price movement on Thursday, with a decrease of—$2,272.39 (3.7%).

Source: CoinGecko

The rest of the crypto market has tanked alongside BTC. According to CoinGecko, today’s global crypto market cap stands at $2.28 Trillion. The market has shred 3.97%  gains in the last 24 hours.

Analysts take a different stance on Mt. Gox

Tom Lee, the director of research at Fundstrat, was optimistic about the possibility of BTC reaching a high of $150,000. The analyst predicts that BTC will experience a “sharp” recovery in the latter half of the year. Lee argued that the Federal Reserve will encounter challenges in maintaining its stringent monetary policy over the long term.

Lee argues that Mt. Gox’s payment of $9 billion in Bitcoin from July to October will not be bad Karma for BTC. Lee’s perspective differs from that of the majority of the community. He adds:

Bitcoin is probably suffering from the Mt. Gox starting distributions in July. That was a huge overhang for many years. But if I was investing in crypto knowing that one of the biggest overhangs is going to disappear in July, I think it’s a reason to actually expect a pretty sharp rebound in the second half. So I think $150,000 is still [possible in 2024]…

Tom Lee

Mt. Gox collapsed after being hacked in February 2014. The exchange lost around 940,000 BTC, which was worth just $64 million at the time. Later, Mt. Gox recovered 141,687 BTC, which is worth around $9 million today.

‘Buy the dip’ sentiment takes over the market

Mentions of “buy the dip” on 4 social media platforms surged after BTC began a momentous slip. Crypto research firm Santiment tracked the total mentions across these platforms. 

They report “The crowd is showing signs of seeing this as a buy the dip opportunity. Ideally, we wait for their enthusiasm to settle down. The time to buy is when they are impatient and skeptical.”

Source: X – Santiment

Bulls are taking the dip to add more to their BTC portfolios, while bears and crypto novices are chucking out of the market. Spot BTC ETFs market situation is not helping either. ETFs have had 6 days of inflows, which is worrisome.

The Crypto Fear and Greed Index, which measures market sentiment for crypto and BTC, is now in the “Fear” region, with a score of 44 out of 100. The index fell to an 18-month low of 31 on June 25 and has been between 30 and 53 ever since.

Cryptopolitan Reporting by Florence Muchai