The original market expectation was that Bitcoin would rebound in July, but the market’s optimism was dashed yesterday. Around 6:00 p.m. on the 3rd, BTC plunged to $59,570, although it briefly rose above $60,000 again, it further dropped to a low of $59,375 in the early hours of the 4th.
As of writing, it has returned to $60,327, marking a 3.12% decrease in the past 24 hours.
Bitcoin’s trend. Source: OKX Spot
Over the past 24 hours, the entire network has liquidated $220 million.
Under the volatile market of Bitcoin, according to Coinglass data, over the past 24 hours, the total amount of liquidations in the cryptocurrency market exceeded $220 million (with long positions accounting for $200 million), affecting nearly 90,000 people.
What caused the market to plummet?
Regarding the plunge below $60,000 yesterday evening, Charles Edwards, the founder of Capriole Fund, posted on X late in the evening. He cited speculation on Bitcoin’s on-chain changes, suggesting that the main reason for this drop is likely due to the fact that the exchange Mt. Gox has begun repaying Bitcoin to creditors, triggering market selling pressure.
The news of Mt. Gox compensating creditors has been circulating since the beginning of this year. However, the current concern in the market is that, from February 2014 to the present, Bitcoin has risen from $850 to over $60,000. Creditors may trigger a wave of sell-offs.
Industry insiders believe that from 2014 to now, Bitcoin has risen nearly 74 times. Once creditors receive compensation, there will inevitably be selling pressure, especially from those who hold a large amount of Bitcoin. This could also trigger panic selling among other investors, leading to further Bitcoin sell-offs.
Analysts believe that the impact of Mt. Gox’s sell-off is manageable.
However, Galaxy Research Director Alex Thorn commented on X at the end of June, suggesting that the Bitcoin sell-off caused by Mt.Gox would be less than expected. He explained that since nearly 75% of creditors opted for an early payout (accepting a 10% devaluation), only about 95,000 Bitcoins will be used for early compensation at present (the rest of the BTC will take longer to pay):
About 20,000 tokens belong to the claim fund
10,000 tokens belong to Bitcoinica BK
The remaining approximately 65,000 tokens belong to individual creditors
Therefore, he believes that the selling pressure on Bitcoin will not be as great as investors imagine. However, due to its low liquidity, BCH may experience more severe declines.
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