Is a Major Bitcoin Sell-Off Imminent?
NAIROBI (CoinChapter.com) — On May 27th, Bitcoin witnessed a significant drop in value following the transfer of 12,240 BTC ($843.6 million) from the Mt. Gox wallet. The wallet, which previously held 140,000 BTC, still retains 125,651 BTC ($8.66 billion). This sudden sell-off caused a brief panic in the market, resulting in a reversal and trapping of retail investors. However, Bitcoin has displayed resilience and has managed to recover.
A snippet from Ash Crypto’s post on X
Mt. Gox, once a prominent Bitcoin exchange, suffered a devastating hack in 2014, leading to losses exceeding $450 million and ultimately forcing its closure. The recent transfers have revived concerns regarding the fate of the remaining funds held by the disgraced platform. Blockchain intelligence company Arkham Intelligence reports that Mt. Gox still possesses 137,892 BTC ($9 billion). The recent transfers have reignited worries about the future of the remaining funds held by the disgraced platform.
Bitcoin’s Strength Tested as Bulls and Bears Clash
Despite the initial panic, Bitcoin has demonstrated remarkable resilience by quickly recovering from the dip caused by the Mt. Gox transfers on May 27th. At present, the flagship cryptocurrency is trading at $67,791, experiencing a 1.15% loss in the last 24 hours and a 4.59% decline over the week.
BTC/USD 1-day price chart. Source: TradingView
Technical analysts remain optimistic, pointing to Bitcoin’s ability to rebound swiftly from the sell-off as evidence of its underlying strength. However, caution prevails as the crypto community prepares for potential aftershocks from the Mt. Gox saga.
Bitcoin has encountered significant resistance within the price range of $72,000-$74,000. This range has proven to be a formidable barrier, thwarting multiple upward attempts. If this resistance is successfully breached, it could trigger a substantial rally and potentially push Bitcoin to new all-time highs. However, if the resistance holds, Bitcoin may consolidate or experience minor retracements. In such a scenario, the 100-day moving average at $64,700 will serve as crucial support.
Factors Impacting Bitcoin’s Price
The anticipation of the U.S. Securities and Exchange Commission’s (SEC) final decision on spot ether ETFs has also influenced the recent Bitcoin sell-off. Although the SEC approved the ETFs, there was no significant impact on Bitcoin prices. Over the past 24 hours, Bitcoin’s price has fluctuated between $68,183 and $69,506.
Bitcoin has declined approximately 19.59% from its peak of $73,750 and dropped below $60,000 in the first week of the month. Currently, the market is grappling with regulatory scrutiny, with the SEC targeting major crypto players like Consensys. Additionally, the excitement surrounding Spot Bitcoin ETFs is waning. Blackrock ETF experienced outflows for the first time since its launch in January, with nearly $36.9 million exiting the fund. This indicates that even institutional investors are susceptible to market sentiments and FUD (Fear, Uncertainty, and Doubt).
