In the past week, the price of Bitcoin has taken a significant hit, falling by nearly 12% to about $55,700 as of noon ET on Monday. Experts attribute this latest dip to an uptick in on-chain selling, which has put pressure on the original cryptocurrency.
One major factor contributing to the recent selloff is the repayments being made by Mt. Gox, a Tokyo-based crypto exchange that went bankrupt following a hack a decade ago. The exchange has started returning about $8 billion in Bitcoin to creditors, with 47,228 Bitcoin already verified to have moved to a new address for repayments. This news has spooked the market and prompted current holders to begin selling, according to Matteo Greco, a research analyst at Fineqia International.
In addition to Mt. Gox repayments, Bitcoin has also been transferred to exchanges by the German and U.S. governments, totaling $737.6 million. This Bitcoin is believed to have been seized by authorities in various criminal cases, further adding to the selling pressure on the market.
Since hitting record highs in mid-March, Bitcoin has struggled to gain momentum, with the MVRV ratio indicating an average unrealized profit of 50% among market participants. The recent Bitcoin halving, which reduced rewards for miners, has also contributed to selling pressure exceeding demand.
If the current decline continues through the week, Bitcoin will have been in decline for five consecutive weeks, the longest span since the 2022 bear market. However, experts like Andrew Baehr from CoinDesk Indices believe that these market pressures are finite and that investors can expect some resolution in the future.
Looking ahead, some in the market are considering the possibility of a “Trump Trade” to boost Bitcoin prices. With the former president showing interest in the crypto industry and seeking advice from figures like Elon Musk, there is speculation that a Trump victory in November’s election could lead to a rally in the market.
Overall, while Bitcoin is facing short-term challenges, there is optimism that potential waves of new adoption and market developments could provide support and drive prices higher in the future.