Bitcoin Price Crashes Below $61,000: The Main Reasons

3 months ago

In the past 24 hours, the Bitcoin (BTC) terms fell by up to 4.8%, plummeting to a caller debased of $60,601 aft trading supra $64,000 conscionable a time earlier. This diminution tin beryllium attributed to a operation of factors, including developments from the Mt. Gox saga, a important liquidation of agelong positions, and ongoing miner capitulation.

#1 Mt. Gox News Shakes Market Confidence

The abrupt and steep diminution from $62,900 to $60,601 successful Bitcoin’s terms coincided intimately with a caller announcement from the trustees of the defunct Bitcoin exchange, Mt. Gox. This exchange, cardinal to 1 of the earliest and largest Bitcoin thefts, declared it would commencement repaying victims utilizing the stolen assets from a 2014 hack successful July 2024.

According to Nobuaki Kobayashi, the rehabilitation trustee, the repayment process volition see Bitcoin (BTC) and Bitcoin Cash (BCH) and commencement successful aboriginal July. “The Rehabilitation Trustee has been preparing to marque repayments successful Bitcoin and Bitcoin Cash nether the Rehabilitation Plan […] The repayments volition beryllium made from the opening of July 2024,” the announcement reads.

This quality was perceived negatively by the market, chiefly owed to fears of oversupply from beneficiaries apt selling disconnected assets that person massively appreciated since their archetypal concern play earlier 2013. In May 2023, the trustee moved implicit 140,000 BTC, worthy astir $9 billion.

This transaction was important arsenic it was the archetypal question of these funds successful 5 years, tracked intimately by analysts and traders. Market reactions were immediate; Bitcoin prices tumbled as speculations astir imaginable marketplace flooding with these repaid coins took hold.

#2 Record Liquidations Of Long Positions

Adding to the downward pressure, determination was a notable surge successful the liquidation of agelong BTC positions. According to the latest data from Coinglass, a staggering $85.4 cardinal worthy of agelong positions were liquidated. This lawsuit marks the largest liquidation since April 30 and May 1, erstwhile implicit $195 cardinal ($95 cardinal and $100 cardinal respectively) successful longs were liquidated, correlating with a 12.5% terms driblet implicit those 2 days.

Such liquidations hap erstwhile the marketplace terms reaches the liquidation terms of leveraged positions, triggering automatic sell-offs to screen the losses, further driving the terms down. This cascade effect contributes importantly to accelerated terms declines and accrued marketplace volatility.

#3 Ongoing Miner Capitulation Adds To Sell Pressure

The 3rd captious origin affecting Bitcoin’s terms is the ongoing miner capitulation. Miner capitulation refers to a concern wherever miners, peculiarly those operating with marginal efficiency, statesman selling their mined BTC to screen operational costs owed to unprofitability. This signifier tin exert important downward unit connected Bitcoin prices arsenic it increases the proviso of Bitcoin being sold successful the market.

As reported by NewsBTC, renowned crypto expert Willy Woo and others person pointed retired that miner capitulation is simply a important signifier to monitor, particularly pursuing the Bitcoin halving events that trim miner rewards by half, thereby straining their profitability. Woo noted precocious that the betterment from specified capitulations has historically been dilatory and tied intimately to the resurgence successful mining enactment and hash rates.

Crypto adept Jelle, speaking via X, highlighted the ongoing quality of this capitulation today, saying, “Hash Ribbons are showing that miner capitulation is ongoing — precisely what you privation to spot post-halving. Generally speaking, the marketplace starts rallying erstwhile that capitulation signifier comes to an end.”

At property time, BTC traded astatine $61,241.