Bitcoin slides 5.2% amid Mt. Gox sell-off fears

Bitcoin saw renewed pressure as fears of creditor sell-offs from Mt. Gox dampened investor confidence, casting doubts on the recent crypto bull market. The cryptocurrency dropped up to 5.2 per cent on Monday, trading at $55,800 in London, down from its March peak of $73,800.

Mt. Gox, bankrupted by a major hack a decade ago, is returning about $8 billion in Bitcoin to creditors, sparking concerns about increased market supply and potential price drops.

Further unsettling markets are reports of Germany’s Bitcoin sales and reduced flows into US crypto ETFs. Combined with scepticism over bullish forecasts, these factors paint a cautious investor outlook.

Technical analysts are eyeing Bitcoin’s 200-day moving average, seen as pivotal for signalling market direction. A sustained rise above this level could signal recovery.

This marks Bitcoin’s fifth straight week of declines, reminiscent of the 2022 bear market. Analysts predict continued pressure until signs of the Federal Reserve easing.

Despite a strong start to 2024, Bitcoin’s gains have been eclipsed by the Nasdaq 100, aligning with recent market trends.

In derivatives, bullish sentiment centres on a $100,000 strike price on platforms like Deribit, expecting supportive Fed policies and political developments to aid Bitcoin’s rebound.

Investors await Fed Chair Powell’s testimony and US inflation data for insight into future monetary policies, pivotal for cryptocurrency markets globally.

Attribution: Reuters.