Bitcoin is facing renewed pressure due to concerns over potential sales by creditors of the failed Mt. Gox exchange, which is returning an $8 billion hoard of the digital asset. The cryptocurrency dropped as much as 5.2% on Monday, trading at $55,290 in Singapore, significantly below March’s record high. Smaller tokens like Ether and XRP also fell.
Sentiment is further dampened by signs of the German government disposing of seized Bitcoin and cautious global markets following France’s weekend legislative elections.
Mt. Gox, once the world’s largest Bitcoin exchange, was hacked in 2011 and went bankrupt in 2014. The staggered return of tokens to creditors suggests a potential increase in market supply.
The prolonged losses in Bitcoin are prompting speculators to look for technical indicators of recovery. Market analysts are watching the 200-day moving average for signs of stabilization. Despite Bitcoin’s earlier gains in 2024, it faces continued risk of a “grind lower” until the Federal Reserve eases monetary policy. However, bullish options wagers and strong ETF inflows indicate some investors view the dip as temporary.