CoinDesk Report:
The cryptocurrency market has recently experienced significant volatility, with Bitcoin (BTC) dropping below $55,000. This decline is attributed to extensive liquidation and substantial fund movements from the now-defunct Mt Gox exchange. Over the past 24 hours, data reveals a staggering $678 million in liquidations, causing Bitcoin to plummet by 7.4% to $53,400, its lowest since February 26, 2024. This downturn has also triggered a sharp decline in altcoins.
What caused the recent liquidations?
Bitcoin’s sharp decline coincided with Mt Gox transferring approximately $2.7 billion worth of Bitcoin. As part of a creditor repayment plan expected to begin earlier this month, the exchange moved 47,228 BTC to a new wallet address. Some of these funds were further redistributed to other addresses, prompting market instability. Visit COINTURK FINANCE for the latest financial and business news.
The wave of liquidations affected over 230,000 investors, with Bitcoin accounting for most of the $2.221 billion in liquidations. In most cases, long positions were liquidated, totaling about $1.818 billion. Ethereum (ETH) also felt the impact, with $1.634 billion in liquidations, $1.433 billion of which came from long positions, causing its price to drop by 10.57% to $2,890.
Why are Bitcoin cash investors concerned?
Experts such as Peter Chung from Presto Research and Ben Caselin from VALR have weighed in on the situation. Chung warned that due to Mt Gox creditors potentially liquidating their holdings swiftly, cryptocurrencies with lower support like Bitcoin Cash (BCH) may face greater selling pressure. Conversely, Caselin suggested that the underlying market structure remains unchanged, indicating Bitcoin could stabilize below $50,000 for a period.
Key takeaways for investors
• Monitor large fund movements on exchanges like Mt Gox to gauge potential market impacts.
• Exercise caution with long positions during market volatility.
• Consider the impact of creditor repayment plans on cryptocurrency prices.
• Stay informed on market structures and expert analyses to make informed decisions.
Despite recent turbulence, industry experts remain confident in Bitcoin’s intrinsic value and long-term potential. They believe current price fluctuations are predominantly driven by short-term traders and do not signify any fundamental changes in market dynamics.
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