Bitcoin Traders Anticipate a Drop to $50,000 with Potential Sale of Billions of Dollars in BTC by Mt. Gox and the German Government
After a sharp drop, Bitcoin is causing concern as many investors expect prices to fall to $50,000 in the coming weeks, with billions of dollars worth of BTC potentially being released into the market.
Bitcoin has lost nearly 10% in the past seven days, falling below a crucial technical indicator on Thursday and wiping out all gains since late February. This sudden drop has resulted in the liquidation of over $550 million in long positions in the crypto market.
Wallet Activity and Expected Massive Sell-Off
The selling pressure is largely coming from wallet activity linked to a German government entity and the defunct crypto exchange, Mt. Gox. Market analysts, such as those at QCP Capital, attribute this bearish sentiment to these wallet movements.
The selling pressure on Bitcoin is not expected to ease in the coming days. The German government still holds over $2.3 billion worth of Bitcoin, Mt. Gox holds over $8 billion, and the U.S. government holds over $12 billion.
Rachel Lin, founder of SynFutures
Mt. Gox Distribution and German Government Movements
Mt. Gox has begun distributing the bitcoins and bitcoin cash stolen from customers during a 2014 hack, causing BTC to drop 8% on Friday. Additionally, a wallet linked to the German Federal Criminal Police Office (BKA) has been transferring millions of dollars worth of Bitcoin to crypto exchanges since mid-June. These potential sales had already negatively impacted investor sentiment, and the arrival of the Mt. Gox transfers further worsened the situation.
BTC prices briefly appeared to recover in the early afternoon, surpassing $56,500 after hitting a low of $53,600 in the morning.
