Over $678M in Crypto Liquidated in 24 Hours as Bitcoin Price Drops Below $54K
By Shalini Nagarajan
Last updated:
July 5, 2024, 03:21 EDT
|
1 min read
The price of Bitcoin hit a four-month low on Friday following a $2.7b transfer by Japanese crypto exchange Mt. Gox to a new wallet. This move, along with the exchange’s repayment plan for creditors and cautious trading by leveraged traders, contributed to the market uncertainty.
The cryptocurrency saw a 5% drop to $53,806 before recovering slightly to about $54,658 as of 05:55 UTC. Over the past week, it has declined by over 11%, and by 22% in the last month.
The decline in Bitcoin’s value was triggered by a report from Arkham Intelligence about Mt. Gox’s significant transfer. This move is the largest by the exchange since May, following smaller test transactions conducted on Wednesday.
Mt. Gox’s $2.7b transfer coincided with the exchange’s commencement of repayments to creditors on Friday, with plans to distribute Bitcoin worth $9b in total. Analysts are concerned that this influx of Bitcoin into the market could result in price volatility and put downward pressure on its value, as creditors are expected to sell their holdings.
Earlier in the year, Bitcoin experienced a surge after the US introduced exchange-traded funds, reaching a peak of over $73,000 in mid-March. However, these gains were short-lived, and the price has since plummeted.
In addition, crypto liquidations have surged to $682.76m in the past 24 hours, marking the highest level in two months, according to CoinGlass. The liquidations included $589.54m from long positions and $93.2m from short positions, with long BTC positions accounting for $185.08m.
Analysts have also expressed concerns about the potential replacement of Joe Biden as the Democratic presidential nominee. This apprehension arose after his unsteady debate performance against rival candidate Donald Trump, with fears that Biden’s successor may be less supportive of cryptocurrencies.
Alex Kuptsikevich, FxPro senior market analyst, predicts a further drop for Bitcoin, suggesting that a 12% decline to $51.5k is more likely from the current level than a similar 12% increase to $65.8k.