Bitcoin experienced a notable decline on Monday, falling over 5% in daily trading following an announcement from the defunct exchange Mt. Gox.
The exchange is set to distribute $9 billion in Bitcoin and Bitcoin cash repayments starting in July.
This news has driven Bitcoin’s price down to around $60,000, its lowest level in nearly six weeks.
Analysts point to a “sell the news” reaction, where investors preemptively offload assets in anticipation of future price drops.
Ryan Lee from Bitget Research explained, “The repayment is sparking concerns about an influx of bitcoin supply, with many expecting beneficiaries to sell their coins to secure gains accumulated over the years.”
Despite this substantial repayment, Lee highlighted factors that could mitigate the impact.
The Federal Reserve’s Net Liquidity Index has surged to a peak level of $6.5 trillion, releasing $400 billion into the market.
Combined with potential interest rate cuts, these elements might help Bitcoin withstand the negative pressure from the Mt. Gox selloff.
Investor sentiment is turning cautious, as noted by Neil Roarty of Stocklytics. He observed a fundamental shift, with Bitcoin no longer tracking the Nasdaq, which hit record highs last week.
Roarty also mentioned rumours of large-scale sales by major miners and institutions, adding to the bearish outlook.
He warned that if this sentiment persists, Bitcoin could test the symbolic $50,000 mark.
CryptoQuant analysts echoed these concerns, noting that Bitcoin is trading below a critical support level.
They foresee a potential correction of 8%-12% towards $60,000.
A drop below this threshold would mark a significant decline, not seen since early May.
As of the latest data, Bitcoin was trading at approximately $60,149, down 5.7% over the past 24 hours.
Ether also saw a drop of over 6%, with the global cryptocurrency market cap falling by 5% to $2.33 trillion, according to Coingecko.