Top Analyst Explains Reasons for Potential Bitcoin Price Decline
Important Update: Bitcoin Under Pressure as Mt. Gox Administrators Transfer $9 Billion to Creditors
Bitcoin (BTC) is currently facing a decline in value as traders closely monitor the wallets associated with the defunct Mt. Gox exchange. The administrators of Mt. Gox are making significant efforts to return a massive $9 billion worth of Bitcoin to its rightful creditors.
Analysts had previously expressed concerns that the transfer of Bitcoin from the Mt. Gox era could disrupt the market and put downward pressure on BTC prices. These concerns have now materialized as the crypto market has experienced a 2.7% drop, bringing the total market capitalization down to $2.68 trillion.
Key Support Levels to Keep an Eye On
Prominent crypto trader Bleeding Crypto recently tweeted about critical support levels for Bitcoin (BTC) amidst worries about the Mt. Gox address staging funds. Bleeding Crypto highlighted two essential support areas that traders should closely monitor. The first support level is the 50-day Exponential Moving Average (50EMA) on the daily time frame.
$BTC
As MtGox address is staging funds, I am looking for 2 local areas to hold as support. 1st the 50EMA on the daily TF and if not then the reload Fib Zone. God help us if neither one holds…… Then its going to get UGLY. Its never a boring day in crypto!
pic.twitter.com/g4DqChb5Bd
— Bleeding Crypto (@Bleeding_Crypto)
May 28, 2024
If Bitcoin fails to hold at the 50EMA, Bleeding Crypto suggests looking at the reloaded Fibonacci Zone as the next support area. The trader warns that Bitcoin’s price could face significant downside risk if neither of these support levels manages to hold.
Potential Further Decline in Bitcoin Price
One key factor that could contribute to a further drop in Bitcoin’s price is the potential liquidation of assets by Mt. Gox creditors. As these creditors finally receive their long-awaited Bitcoin, there is a fear that many may choose to immediately liquidate their holdings. This influx of sell orders could significantly increase selling pressure, resulting in a further decline in price.
This potential scenario of mass liquidation adds to the uncertainty and volatility in the market. Traders are cautious about the impact that such a large-scale sell-off could have, particularly in an already sensitive market environment.
BTC Experiences 4% Slide
At present, Bitcoin prices have dropped by 4%, falling from an intraday high of $70,600 to a low of $67,555 within a span of 12 hours. The price has since slightly recovered to $68,044, remaining within its multi-month range-bound channel.
Despite the drop in price, trading volume in the last 24 hours has surged by 62%, reaching $30.3 billion, with a market cap of $1.34 trillion.