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Bitcoin Price Drops Below $59,000 as Selling Continues
The price of bitcoin has dropped nearly 4% in the past 24 hours. (SOPA Images via Getty Images)
Bitcoin’s value fell below $59,000 (£46,286) on Thursday, as multiple factors exacerbated selling pressure on the digital asset. Bitcoin (BTC-USD exchange rate) fell 3.9% in the 24 hours to trade at $58,770 at the time of writing.
Other cryptocurrencies, ether (ETH-USD) and solana (SOL-USD) declined further, by 4.6% and 7.3%, respectively. The global cryptocurrency market capitalization is now $2.28 trillion, down 4.1% from the previous day, according to Coingecko data.
Bitcoin Liquidations Surge
The recent decline in the price of bitcoin has been exacerbated by a spike in long liquidations. Futures traders betting that the price of bitcoin and other cryptocurrencies would increase in value have lost more than $240 million in the past 24 hours, according to CoinGlass data.
Bitcoin futures have seen over $61 million in long liquidations, while the cryptocurrency market as a whole has seen over $247 million (£193.66 million) in long liquidations. A long liquidation occurs when an investor who holds a long position in a financial instrument, such as Bitcoin or another cryptocurrency, is forced to sell that position. This typically happens in leveraged trading, where the investor has borrowed funds to increase the size of their position and fails to meet margin requirements, resulting in the position being closed to prevent further losses.
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Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to a partial or complete loss of the trader’s initial margin. This happens when a trader fails to meet the margin requirements for a leveraged position, not having enough funds to keep the trade open.
Bitcoin is plagued by multiple selling pressure factors
Several factors emerged last week to increase the selling pressure on bitcoin. Most notably, the announcement by the Mt. Gox trustee that creditors of the defunct exchange will begin receiving refunds totaling approximately 142,000 bitcoins, starting this month.
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Investors remain wary over whether Mt. Gox creditors could start unloading their redistributed bitcoins onto exchanges after waiting more than a decade to receive them. More than $9.4 billion in bitcoin is owed to about 127,000 Mt. Gox creditors. Many investors fear that this could lead to many creditors cashing out after a decade of untouched profits.
Second data From Lookonchain, an unidentified whale has transferred 1,723 bitcoins, worth over $168 million, to Binance in the last 24 hours. This transfer to the largest cryptocurrency exchange could suggest that this entity is looking to sell and secure profits.
To know more: Bitcoin Price Drops Ahead of FTX, Mt Gox Bankruptcy Payments
However, Mt. Gox’s $9 billion could be offset by institutional inflows into U.S.-based spot bitcoin exchange-traded funds (ETFs). According to Dune’s analysis, these ETFs have accumulated more than $52.5 billion in bitcoin since their launch in January of this year.
Spot Bitcoin ETFs See Net Outflows
However, the eleven spot bitcoin ETFs in the United States saw a total daily net outflow of $20.45 million on Wednesday. Only two funds saw net inflows, while the remaining nine showed zero flows.
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According to SoSoValue, Grayscale’s GBTC saw daily net outflows of $26.99 million, partially offset by $6.55 million of net inflows into Fidelity’s FBTC. dataThe other nine ETFs, including BlackRock’s IBIT, had zero net flows.
The eleven Bitcoin funds had a trading volume of about $800 million on Wednesday, down from $995 million on Tuesday. This recent trading volume is significantly lower than in March, when daily volumes ranged between $8 billion and $10 billion. Since their inception in January, these ETFs have accumulated a total net inflow of $14.62 billion.
German government transfers seized bitcoin to cryptocurrency exchanges
Meanwhile, an analysis by Arkham Intelligence has shown that the German government recently transferred $24 million in seized bitcoin to cryptocurrency exchanges Kraken and Coinbase.
These bitcoin transfers came from a wallet linked to the German Federal Criminal Police Office (BKA) and may be linked to the BKA’s seizure in 2013 of approximately 50,000 bitcoins from a movie piracy website.
To know more: What are Bitcoin ETNs?
Arkham Intelligence data indicates that these transfers follow previous movements of $195 million in bitcoin to exchanges last week. In total, over $425 million was moved last week from the wallet associated with BKA.
Transfers to exchanges could signal an intent to liquidate some assets, potentially further increasing downward pressure on the digital asset.
To know more: What is a spot bitcoin ETF and why did it spark a cryptocurrency rally?
Another selling pressure point has emerged as the U.S. government recently sent 3,940 bitcoin to cryptocurrency exchange Coinbase, according to data from Arkham Intelligence. The data indicated that the bitcoin was seized in early 2024 from Banmeet Singh, a convicted drug dealer.
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