CoinDesk Report:
Mt.Gox has begun to repay the creditors who suffered losses in the 2014 collapse. As of the time of writing, Ethereum dropped to a intraday low of $2825, seemingly continuing its four-day streak of red candles.
Bitcoin, the world’s largest cryptocurrency, hit its lowest level since February earlier today, as the market reacted to news of wallet activity related to Mt. Gox. In fact, the scale of this collapse was so significant that BTC fell below $55,000 on the price chart, experiencing a decline of over 9% on the weekly chart.
However, Ethereum is not the only company that is leading Bitcoin. It has also experienced more severe losses, with ETH dropping below $3,000 and hitting an intraday low of $2820.
Whale activities also contributed to the losses.
The freefall of Ethereum seems to have been exacerbated by whales selling large amounts of Ethereum (ETH) to repay their debts from sunk bets.
In fact, on-chain data resource LookOnChain revealed that the drop in ETH prices brought liquidation risks to Ethereum whales who were eager to obtain ETH through Aave and Compound. For example, the tool tracked an address on X that sold 26,600 ETH to repay debts on Aave.
Liquidation of assets
As expected, the market bloodbath on Friday led to the liquidation of nearly $650 million worth of cryptocurrencies within just 24 hours, including $537 million in long bets.
In the 24 hours leading up to the time of writing, long positions in ETH worth over $130 million were also forcibly closed.
Meanwhile, the total open interest (OI) of ETH futures contracts on top exchanges also decreased by nearly 12% during the mentioned period, indicating capital outflow from the market.
Lastly, Ethereum’s CME OI also dropped by 7.59%, confirming investors’ pessimistic sentiment.
ETH/USDT technical analysis
The decline of ETH/USDT has continued for the fourth day, putting pressure on this currency pair. Due to the same reasons, this pair has broken through key support levels during the peak of the crash. ETH’s price has dropped below the 50, 100, and 200 simple moving averages on the daily chart.
The last time ETH/USDT broke below the three daily trend lines was in August 2023. At that time, the cryptocurrency market suffered losses due to reports of Elon Musk’s SpaceX selling its holdings of Bitcoin.
According to data from CoinMarketCap, the last recorded price for ETH was $2920, which is 40% lower than its all-time high. Ethereum’s lackluster performance this week further reinforces the short-term pessimistic outlook.
ETH/USDT will now face resistance around $3200, which was previously encountered between mid-April and mid-June.