Bitcoin's move lower comes as defunct bitcoin exchange Mt. Gox is set to start distributing bitcoin and bitcoin cash repayments in July, according to a notice sent by Rehabilitation Trustee Nobuaki Kobayashi on Monday.
Bitget Research analyst Ryan Lee told The Block Mt. Gox's repayment announcement is “a classic ‘sell the news' scenario.”
“The repayment in bitcoin is causing market worries about the influx of supply, and it's likely that beneficiaries will sell their coins to capitalize on the significant gains made over the last decade,” Lee added.
The analyst added that although the proposed $9 billion repayment is substantial, it is coming up against several factors that can contribute to bitcoin's resilience.
“In the macro environment, the Fed Net Liquidity Index has topped $6.5 trillion, releasing $400 billion of liquidity in the market, reaching a 24-month peak level. Combined with likely rate cuts, bitcoin has the advantage and the potential to resist any negative impact of the Mt. Gox selloff,” Lee said.
Investors taking risk-off approach to bitcoin
According to Stocklytics analyst Neil Roarty, “Bears are arguing that there has been a fundamental shift in both market and mood, pointing to how bitcoin no longer appears to be tracking with the Nasdaq, which soared to record highs last week.”
“The bulls will have to console themselves with the knowledge that, as always in crypto, fortunes can reverse extremely quickly,” Roarty said.
This forecast comes after CryptoQuant analysts said bitcoin is trading below a critical support level. “Falling under this threshold suggests a potential 8%-12% correction toward $60,000,” CryptoQuant wrote in an X post. A decline below the $60,000 mark would be a significant drop, falling to a level not seen since May 3, when bitcoin was trading around $59,000.
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Bitcoin changed hands at around $60,149 at the time of writing, having fallen 5.7% in the past 24 hours, according to The Block's price page. The price of ether has also dipped over 6% to $3,345 in the same period. The global cryptocurrency market cap today is $2.33 trillion, dropping 5% in the last 24 hours, according to Coingecko data.