📌Bitcoin extends 7% decline, defending $54K as Mt.Gox impact fears grow📉Altcoins in panic

Bitcoin is down more than 7% today as investors capitulate in the largest cryptocurrency, which has put pressure on the so-called “altcoin” market, leading to double-digit declines in cryptocurrencies such as Cardano, Chainlink, Avalanche, and even Dogecoin. Additionally, Ethereum is down nearly 9% today. Investors may also be concerned that US ETFs will start selling Bitcoin at a faster pace amid the Bitcoin market capitulation and growing concerns over Mt. Gox’s impact on Bitcoin’s price. The exchange has nearly 141,000 Bitcoins worth $8.5 billion (versus $14.6 billion in total net inflows into US Bitcoin ETFs since January 11) that will be sold in a few days or weeks from now, as authorities have informed that the process will begin in July.

• Bitcoin’s drop below the 54k level has liquidated nearly $222 million worth of BTC long positions, with $665 million liquidated across the entire cryptocurrency market according to CoinGlass data in the last 24 hours.
• The reason is not only the weak performance of Bitcoin and net inflows and overall weak activity in US ETFs, but also the growing fears related to the sell-off of Mt. Gox reserves (reimbursement of creditors, influenced by hackers in 2014).
• Yesterday, Mt.Gox transferred more than 47.2k Bitcoin (1/3 of all BTC reserves) to the Bitbank exchange which is supporting the refund process. Mt.Gox has a total of BTC
• This was the first such transfer since May; the exchange announced nearly 10 days ago that it will start repaying creditors in July. Furthermore, the German government-related address is putting pressure on market sentiments, with 42.2k Bitcoin still unavailable for sale, after authorities decided to sell 7.5k BTC so far, since June 19.
• The famous and controversial founder of the Tron blockchain, Justin Sun, has announced that he wants to start negotiating with the German authorities, willing to buy German Bitcoins worth nearly $2.2 billion to minimize the impact of their sale on the market.

Bitcoin (D1 interval)

Bitcoin has fallen well below the key support zone near the SMA200, potentially reversing the trend, for a longer time. However, if the bulls return above $58k, defending the 38.2 Fibonacci retracement level, Bitcoin can still recover faster. In the scenario of further declines, we can see a major resistance zone at the $51k level with a significant 38.2 Fibonacci retracement level of the upswing from the fall of 2022. Testing those levels could lead to another price decline of almost 7% from current levels. A drop below $50k could be driven by potential ETF outflows on the rise and this scenario would likely be the worst for Bitcoin, with the potential to test levels not seen since January 2024.

Source: xStation5

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