The price of Bitcoin lost over 5% on Monday after the failed exchange Mt. Gox said it would reimburse investors for up to $9 billion in the coming weeks.
BTCUSD – Daily Chart
The price of BTC has tumbled through the $60,000 level, and the next support is at the $56,577 level.
Investors selling on Monday were fearing up to 140,000 bitcoins hitting the market in less than one month. That number of coins would be like the liquidation of Fidelity’s spot bitcoin ETF, which recently held more than 160,000 bitcoins.
However, some analysts did not expect to see that many coins sold.
“We think fewer coins will be distributed than people think and that it will cause less bitcoin sell pressure than the market expects,” said Alex Thorn, head of research at Galaxy Digital.
Thorn told CoinDesk that 75% of creditors will take the “early” payout in July, meaning a distribution of about 95,000 coins. He also said 65,000 of those coins will go to individual investors, but they may be more keen to hold onto them.
Recent ETF outflows showed that a second consecutive week of selling was the highest two weeks of outflows since the ETFs were founded in January. The next few weeks could be tough for Bitcoin if Mt. Gox’s selling leads to further investor capitulation.
On Sunday, Bitcoin whale transactions (exceeding $100,000) were lower by 42% from the previous days ahead of the Mt. Gox news, according to data from Santiment.
Mt. Gox was launched in Shibuya, Japan, in 2010 and, at one point, handled more than 70% of all bitcoin trades. However, it ceased operations in 2014 after hundreds of thousands of coins went missing.
Bitcoin is still up 40% year-to-date based on current prices.
