Bitcoin plummeted to a four-month low, breaching support levels due to anticipated token sales and selling pressure from leveraged traders.
The world’s largest cryptocurrency dropped over 8%, falling to $53,523, below the $55,000 support level, marking its lowest since February-end.
Despite gains in assets like the Nasdaq, it has lost about 12% this week.
Ether fell 9% to $2,841, a more than two-month low.
Reports indicate Mt. Gox, once the top crypto exchange, may return bitcoin to creditors, potentially selling due to lower 2014 values.
“The selling pressure is still related to creditor selling from the failed Mt Gox exchange,” Tony Sycamore, an IG market analyst, explained.
“However, the acceleration to the downside suggests the market is trying to get ahead of the creditor flows.”
Concerns also arise about Joe Biden’s potential replacement due to a weak debate against Donald Trump, affecting crypto support.
Bitcoin surged to a record $73,803.25 in March following U.S. ETF launches, but has since faced challenges.
“With an asset that has been rangebound for quite a while and recently in the lower end of that range, there are plenty of margined positions,” said Justin D’Anethan of digital asset market maker Keyrock, which are obliged to sell when prices drop.
“This of course creates a cascading effect, pushing prices further down than it might in a market with less leverage.”
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