Over $678M in Crypto Liquidated in 24 Hours as Bitcoin Price Drops Below $54K

Shalini Nagarajan

Last updated:

July 5, 2024, 03:21 EDT | 1 min read

Bitcoin’s price fell to a four-month low on Friday after Japanese crypto exchange Mt. Gox transferred $2.7b worth of the crypto to a new wallet. The exchange also started paying back creditors, and there were more sales as leveraged traders played it safe due to market uncertainty.

The asset dropped 5% to $53,806, before recovering slightly to about $54,658 as of 05:55 UTC. It has declined over 11% in the past week, and fallen 22% in the last month.

Bitcoin’s plunge followed Arkham Intelligence’s report about Mt. Gox’s transfer. This transaction represents the exchange’s largest move since May, following smaller test transactions conducted Wednesday.

*MT GOX BEGINS REPAYMENTS

— db (@tier10k) July 5, 2024

Exchange Repayment Plan Threatens Bitcoin Price Stability

Mt. Gox’s $2.7b transfer came just before Mt. Gox began repaying creditors on Friday, aiming to distribute Bitcoin worth $9b in total. These creditors are widely expected to sell their holdings, given that these were worth only hundreds of dollars in 2014.

Analysts caution that such a substantial Bitcoin influx into the market could lead to price volatility and exert downward pressure on its value.

Bitcoin surged earlier this year after the US launched exchange-traded funds, reaching a peak over $73,000 in mid-March. However, those gains haven’t held and the price has since tumbled.

Crypto Liquidations Surge to Two-Month High at $682.76 Million

Furthermore, crypto liquidations have risen to $682.76m in the last 24 hours, marking the highest level in two months, according to CoinGlass. The liquidations amounted to $589.54m from long positions and $93.2m from short positions. Meanwhile, long BTC positions accounted for $185.08m.

Analysts have also raised concerns about Joe Biden potentially being replaced as the Democratic presidential nominee. This concern arises after his shaky debate performance against rival candidate Donald Trump, with worries that Biden’s successor may be less supportive of cryptocurrencies.

Alex Kuptsikevich, FxPro senior market analyst, expects a further drop for Bitcoin. He mentioned that a 12% decline to $51.5k is more probable from the current level, rather than a similar 12% increase to $65.8k.