Bitcoin (BTC) has dropped in value as traders monitor the activity of wallets associated with the defunct Mt. Gox exchange. The administrators of Mt. Gox are intensifying efforts to return a $9 billion hoard of Bitcoin to creditors.
Analysts had previously warned that transferring Bitcoin from the Mt. Gox era could unsettle the market and put downward pressure on BTC prices. This warning seems to materialize as the crypto market has dropped by 2.7%, bringing the total market capitalization down to $2.68 trillion.
Key Support Levels To Watch
In a recent tweet, prominent crypto trader Bleeding Crypto highlighted critical support levels for Bitcoin (BTC) amid concerns surrounding the Mt. Gox address staging funds.
Bleeding Crypto pointed out two crucial support areas that traders should watch closely. The first support level is the 50-day Exponential Moving Average (50EMA) on the daily time frame.
Secondly, if Bitcoin fails to hold at the 50EMA, Bleeding Crypto suggests looking at the reloaded Fibonacci Zone as the next support area. The trader warned that Bitcoin’s price could face significant downside risk if neither of these support levels holds.
How Bitcoin Price Can Fall Further
A major factor that could drive Bitcoin’s price lower is the potential liquidation of assets by Mt. Gox creditors. As these creditors receive their long-awaited Bitcoin, the fear is that many may choose to liquidate their holdings immediately. Such a large influx of sell orders could significantly increase selling pressure, driving the price down further.
This potential liquidation scenario adds to the uncertainty and volatility in the market. Traders are wary of the impact that such a large-scale sell-off could have, particularly in an already sensitive market environment.
BTC Slides 4%
As of now, Bitcoin prices dropped 4%, falling from an intraday high of $70,600 to a low of $67,555 within 12 hours. It then recovered slightly to $68,044 staying within its multi-month range-bound channel.
Despite the price drop, trading volume in the last 24 hours surged by 62%, reaching $30.3 billion, with a market cap of $1.34 trillion.
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