The cryptocurrency market is in turmoil as Bitcoin falls below the $55,000 support level! Mt. Gox repayment plan triggers chain reaction

The cryptocurrency market has experienced significant volatility recently, with Bitcoin, the largest cryptocurrency, continuing a downward trend that began last month and repeatedly falling below key support levels.
Bitcoin’s price fell by about 7.7% in the past 24 hours, crossing the $55,000 mark and falling to $54,310, according to coinlive data.

Bitcoin's Big Drop Liquidates Over $589 Million

Bitcoin prices plunged to about $53,500 in early Asian trading on Friday, hitting that low for the first time in four months.
Volatility in Bitcoin and the broader crypto market has led to huge liquidations, according to CoinAnk data.
A total of $589 million was liquidated, including more than $511 million in long positions and $78 million in short positions. Notably, nearly $100 million was liquidated in the past hour alone.

Mt. Gox repayment plan led to massive selling by crypto whales such as the German government and the U.S. government

According to data from blockchain analysis company Arkham Intelligence, a cold wallet belonging to Mt. Gox transferred 47,228 BTC to an unidentified wallet today (July 5), worth approximately $2.71 billion. Mt. Gox’s move further exacerbated the decline in cryptocurrency prices, with Bitcoin falling below the $55,000 mark within the next hour.

The move comes as the exchange plans to begin repaying creditors this month. A total of $8.5 billion worth of Bitcoin will be repaid to creditors. Previously, Mt. Gox trustee Nobuaki Kobayashi issued a statement on June 24, saying that Mt. Gox had notified creditors that it had completed all necessary steps and would begin repaying debts in July.

Once this repayment plan was announced, most cryptocurrency whales were frequently active and continued to sell large amounts of Bitcoin.

German government sells off

On the eve of Mt. Gox’s clear repayment plan announced half a month ago, the German government began selling 50,000 Bitcoins seized from the illegal website Movie2k.to in January.
According to data from Arkham Intelligence, transactions in Germany have become more frequent in recent days. Today, the number of BTC transferred out by the German government has reached 3,000 ($174.29M).

Previously, the German government transferred as many as 2,800 2,800 Bitcoins on Tuesday (July 2), and the total amount transferred exceeded US$170 million.

U.S. government sell-off

Data from Arkham Intelligence shows the U.S. government traded more than 3,900 Bitcoins worth $240 million a week ago.

Cryptocurrency whales dump massive amounts

Earlier today, blockchain analyst Lookonchain spotted a whale that sold 3,500 BTC for $206 million via the Binance exchange in 5 hours.

On-chain analyst @ali_charts has monitored that Bitcoin whales have sold more than 30,000 BTC in the past month, with the value of these BTC being approximately US$1.8 billion.

Bitcoin and Ethereum options worth $1.54 billion expire

The $1.54 billion in Bitcoin and Ethereum options set to expire today due to a sell-off by crypto whales has also generated a lot of attention in the crypto market.
The notional value of expiring Bitcoin options is $1.04 billion, with 18,339 contracts set to expire. These contracts have a put ratio of 0.71 and a maximum pain point of $62,000.

The greatest pain points in options trading represent the price levels that cause the most financial pain to option holders. Furthermore, the ratio of puts to calls shows that there are more buying options (calls) than selling options (puts).
Ethereum has 162,782 expiring contracts with a notional value of $501.12 million. These contracts have a put ratio of 0.37 and a maximum pain point of $3,350. Analysts at Greeks.Live pointed out that the recent market sell-off caused the crypto market to take a heavy hit, with BTC falling to $57,000 and ETH falling to $3,100.

Additionally, data shows that BTC’s short-term implied volatility (IV) has increased by 10%. Meanwhile, the Deribit Implied Volatility Index (DVOL) rose 3%, with ETH-related parameters rising slightly less than BTC. Skew values ​​indicate bearish market sentiment.

Multiple factors lead to continued decline in Bitcoin price

The reason for the recent market volatility has been intensified selling by long-term whales, including governments, due to the Mt. Gox repayment plan.
However, Mt. Gox, the culprit of this market fluctuation, still holds 140,000 Bitcoins. The German government, which has already conducted a large number of sales, currently holds more than 40,000 Bitcoins, while the U.S. government holds 210,000 Bitcoins. First in line.
The market is currently at a low point, and Mt. Gox BTC distribution will be carried out in 3 phases:
- Advance payment (July to October)
- Intermediate payment (ultimate creditor)
- Final payment (after the year)
The only advance payment that will currently impact the market will be 71,403 BTC, assuming 50% of the coins will be sold, bringing the total sold amount to 35,700 BTC, worth $2.1 billion.
Currently, due to low ETF inflows, the market can handle 6K–10K BTC selling pressure, and during periods of heavy ETF inflows, BTC can easily absorb 15K–25K daily BTC selling pressure, which means that 35,700 BTC will not have an impact on the market As bad an impact as it seems.
The reason behind the BTC sell-off is that people overestimated the sales of Mt. Gox. $44k-$52k will be the area of ​​support for BTC. Only black swan events (wars, pandemics) can push BTC further down.