Bitcoin has plunged to $61,175 amidst a broader market downturn and news surrounding Mt. Gox, reaching oversold levels last seen in 2023. Analyst Van de Poppe anticipates a potential recovery or further decline.
The cryptocurrency market has taken a sharp bearish turn, with Bitcoin (BTC) leading the significant drop. In just the last day, the total market cap of all cryptocurrencies fell by 1.40%, hitting the current level of $2.24 trillion. Notably, Bitcoin has registered a new low of $61,175 at the time of writing, marking a substantial 17.82% drop from its monthly peak of $71,656 recorded just two weeks ago.
This decline started earlier today, with Bitcoin initially priced at $62,590, only to plummet to an intraday low of $58,590. Despite a slight recovery, Bitcoin now stands at the $60,000 mark, indicating a possible stabilization after a day of significant losses.
Analyst Insights
The daily Relative Strength Index (RSI) for Bitcoin, currently at 30.93, reinforces Van de Poppe’s assessment, clearly indicating that Bitcoin is deeply entrenched in the “oversold” territory. Market analyst Michael Van de Poppe highlighted the gravity of the situation, noting that Bitcoin is one of the most oversold assets at present, a condition last observed during major market disruptions like the FTX collapse and the August 2023 correction.
Despite the bearish trends, Van de Poppe suggests that a recovery might be on the horizon. According to his chart, Bitcoin is in a critical support zone, and if it holds, a rebound to a high of $70.3k could be possible. However, failing to maintain this level might drive the price down towards the $52.8k region.
Mt. Gox Impact
Adding to the market volatility is the ongoing saga of Mt. Gox’s repayment plan, which has injected further uncertainty. The infamous exchange, which collapsed in 2014 following a massive hack, is nearing the start of its long-awaited repayment process, set to begin in early July 2024. The exchange has confirmed that all regulatory measures have been implemented to ensure a smooth repayment process, providing long-awaited relief to creditors. However, the market has reacted nervously to these developments.
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Late last month, when Mt. Gox transferred 140,000 Bitcoin to an unknown address—a move consistent with the repayment update—Bitcoin’s price fell from the $70k range to $67k within a few hours. This incident highlights Bitcoin’s broader sensitivity to external shocks, particularly underscored by recent actions from which seized and sold 3,000 Bitcoin but still holds over $3 billion worth of Bitcoin, generating significant unrealized profits.
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