CoinDesk Report:
Byline: Sophie Feng
On July 5th, the cryptocurrency market saw a broad decline. Major cryptocurrencies like Bitcoin, Ethereum, and Binance Coin dropped approximately 10% in the past 24 hours.
According to data from coinmarketcap, as of 3:30 PM on the 5th, the price of Bitcoin fell below $55,000 per coin, quoting at $54,000 per coin, marking a 7.6% decline in the past 24 hours and a 12.05% drop over the past 7 days, hitting its lowest point since February this year.
Popular cryptocurrencies such as Ethereum, Binance Coin, and Dogecoin also experienced continued declines. As of 3:30 PM on the 5th, Ethereum (ETH) was priced at $2,852.59 per coin, falling below the $3,000 mark with a 10.53% decrease in the past 24 hours and a 17.06% drop over the past 7 days. Binance Coin (BNB) was quoted at $469.18 per coin, experiencing a significant drop of 12.06% in the past 24 hours and an 18.62% decrease over the past 7 days.
Data from CoinGlass shows that over the last 24 hours, a total of 234,500 positions were liquidated, amounting to $679 million. According to data from exchanges such as Binance and OKX, the liquidations of long positions significantly outnumbered those of short positions.
Sentiment in the crypto market has notably turned negative. On July 5th, CoinGlass data indicated that the fear and greed index shifted to a low of 29, indicating widespread investor “fear,” marking the lowest sentiment since January 2023.
Industry insiders suggest that this downturn may be influenced by the “Mt. Gox incident” and the German government’s sale of Bitcoin. The influx of a large amount of Bitcoin into the crypto market has increased downward pressure on cryptocurrency prices.
Recently, Mt. Gox, the Japanese cryptocurrency exchange that went bankrupt in 2014, announced it would start reimbursing users for massive cryptocurrency losses beginning in July. Known domestically in the crypto community as the “Mt. Gox exchange,” Mt. Gox was once the world’s largest cryptocurrency exchange but declared bankruptcy in 2014 after suffering a massive loss due to a hacker attack.
Recently, the court overseeing Mt. Gox’s bankruptcy proceedings announced that from July, it would return funds to approximately 20,000 creditors in the form of Bitcoin and Bitcoin Cash. The total value of these cryptocurrencies is estimated at around $9 billion, including approximately 140,000 Bitcoins.
On July 5th, blockchain analytics company Arkham Intelligence reported that Mt. Gox had transferred 47,000 Bitcoins to a new wallet address, valued at approximately $2.6 billion at current prices.
In June, the bankrupt cryptocurrency exchange Gemini refunded users over $2 billion worth of Bitcoin, which contributed to a downward trend in Bitcoin prices.
JPMorgan analysts predict that like Gemini users, Mt. Gox users are likely to sell some of the Bitcoin they receive to profit. They believe the price pressure is temporary and anticipate a rebound starting in August.
Furthermore, several governments have been dumping large amounts of confiscated cryptocurrencies onto the market. Recently, both the US and German governments have begun selling Bitcoin. In late June, the US government sold a batch of Bitcoins confiscated in 2014, totaling approximately 3,940 Bitcoins valued at around $240 million.
According to Arkham Intelligence, since June 19th, the German government has sold 7,583 Bitcoins worth $435 million. On July 4th, the German government transferred cryptocurrencies worth $172 million to cryptocurrency exchanges such as Coinbase, Kraken, and Bitstamp, leading to a sharp decline in Bitcoin prices.