Bitcoin
Bitcoin Price Drops Sharply Amid Mt. Gox Payments, Government Selloff
- Bitcoin has fallen 8% over the past two days amid sell-offs by bitcoin beneficiaries from Mt. Gox and government wallets.
- Bankrupt Mt. Gox still holds about 140,000 bitcoins and has begun paying creditors and former customers.
- Bitcoin’s negative price action since early July has broken through several technical support levels.
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Bitcoin is down 8% in the past two days, down 12% since the start of July and trading at its lowest level since February.
The sharp decline was accompanied by a wave of selling by notable bitcoin holders, including now-defunct cryptocurrency exchange Mt. Gox and the governments of Germany and the US.
Mt. Gox, which was at one point the largest cryptocurrency exchange, went bankrupt in February 2014 after a series of attacks stole nearly a million bitcoins from its customers.
A decade later, Mt. Gox on Friday began paying back part of the $9 billion it owes to creditors and customers through bitcoin and bitcoin cash, according to a statement from the company.
Cryptocurrency wallets linked to Mt. Gox show the now-defunct exchange still holds nearly 140,000 bitcoins that have yet to be paid out, according to data provider Arkham Intelligence.
Meanwhile, recent bitcoin transfers from wallets associated with the German and US governments suggest that both are liquidating some of their bitcoin holdings.
Arkham Intelligence said the German government sold up to $175 million in bitcoin seized on Thursday. The government still holds about 40,000 bitcoins, worth more than $2 billion.
According to for Blockworks, Both the US and German governments have sent a total of $738 million to bitcoin exchanges in the past two weeks, suggesting they will be sold soon.
All this selling pressure caused the price of bitcoin to fall below key technical support levels.
Bitcoin is trading below its 200-day moving average of around $59,500, suggesting further decline in the future.
Fairlead Strategies highlighted $60,000 as a key support level that has now been broken. The decisive breakdown puts bitcoin’s next support level at around $51,500.