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Bitcoin Price Falls Below $59,000 as Selling Continues
The price of bitcoin has fallen nearly 4% in the past 24 hours. (SOPA Images via Getty Images)
Bitcoin’s value fell below $59,000 (£46,286) on Thursday as several factors exacerbated selling pressure on the digital asset. Bitcoin (BTC-USD) fell 3.9% over the past 24 hours, trading hands at $58,770, at the time of writing.
Other cryptocurrencies, ether (ETH-USD) and solana (SOL-USD) fell further, dropping 4.6% and 7.3% respectively. The global cryptocurrency market cap now stands at $2.28 trillion, down 4.1% over the past day, according to Coingecko data.
Bitcoin Liquidations Rise
The recent drop in bitcoin’s price has been exacerbated by an increase in long-term liquidations. Futures traders betting on a rise in the price of bitcoin and other cryptocurrencies have lost more than $240 million in the past 24 hours, according to CoinGlass data.
Bitcoin futures saw over $61 million in long liquidations, while the cryptocurrency market as a whole saw 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 occurs in leveraged trading, where the investor has borrowed funds to increase the size of their position and cannot meet margin requirements, resulting in the position being closed to avoid 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 occurs when a trader cannot meet the margin requirements for a leveraged position due to not having sufficient funds to keep the trade open.
Bitcoin faces multiple selling pressures
Several factors have emerged over the past week that have increased the selling pressure on bitcoin. Notably, the announcement by Mt. Gox’s trustee that creditors of the defunct exchange will begin receiving repayments totaling approximately 142,000 bitcoins starting this month.
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Investors remain cautious about the possibility that Mt. Gox creditors will start selling their redistributed bitcoins on exchanges after waiting more than a decade to receive them. More than $9.4 billion in bitcoins are owed to about 127,000 Mt. Gox creditors. Many investors worry that this could lead to many creditors cashing out their profits after a decade of untouched profits.
According to data From Lookonchain, an unidentified whale 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 lock in profits.
Learn more: Bitcoin Price Falls Ahead of FTX, Mt Gox Bankruptcy Payouts
Still, Mt. Gox’s $9 billion could be offset by institutional flows into U.S.-based bitcoin spot 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.
Bitcoin Spot ETFs See Net Outflows
However, the eleven bitcoin spot ETFs in the United States recorded a total daily net outflow of $20.45 million on Wednesday. Only two funds recorded net inflows, while the other nine posted no flows.
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According to SoSoValue, Grayscale’s GBTC reported daily net outflows of $26.99 million, partially offset by net inflows of $6.55 million to Fidelity’s FBTC. dataThe other nine ETFs, including BlackRock’s IBIT, saw zero net flows.
On Wednesday, the eleven Bitcoin funds recorded about $800 million in trading volume, down from $995 million on Tuesday. This recent trading volume is significantly lower than in March, when daily volumes were between $8 billion and $10 billion. Since their inception in January, these ETFs have accumulated a total net flow of $14.62 billion.
German government transfers seized bitcoins to cryptocurrency exchanges
Meanwhile, an analysis by Arkham Intelligence showed that the German government recently transferred $24 million in seized bitcoins to cryptocurrency exchanges Kraken and Coinbase.
These bitcoin transfers originated from a wallet connected to Germany’s Federal Criminal Police Office (BKA) and may be linked to the BKA’s 2013 seizure of nearly 50,000 bitcoins from a movie piracy website.
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Arkham Intelligence data These transfers follow earlier movements of $195 million in bitcoin to exchanges last week. In total, more than $425 million was transferred last week through the wallet associated with BKA.
Transfers to exchanges may signal an intention to liquidate some of the assets, potentially adding further downward pressure on the digital asset.
Learn more: What is a Bitcoin Spot ETF and why did it spark a crypto rally?
Another point of selling pressure has emerged as the U.S. government recently sent 3,940 bitcoins to cryptocurrency exchange Coinbase, according to data from Arkham Intelligence. The data indicates that the bitcoins were seized earlier in 2024 from convicted drug trafficker Banmeet Singh.
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