Bitcoin Plunges Under $59K as Crypto Bulls See $230M Liquidations

Fears of looming selling pressure on bitcoin (BTC) from defunct exchange Mt. Gox and possible miner sales pushed the largest cryptocurrency to under $59,000 on Thursday for the first time since late April.

Mt. Gox will start distributing assets stolen from clients in a 2014 hack in July 2024, after years of postponed deadlines. The repayments will be made in bitcoin and bitcoin cash (BCH), and could add selling pressure to both markets, as previously reported.

BTC lost 3.3% in the past 24 hours, CoinGecko data shows, with the sell-off beginning shortly after Tokyo equity markets opened for trading. Major tokens declined amid the BTC weakness: Ether (ETH) slumped 4%, while Solana’s SOL and dogecoin (DOGE) fell as much as 8%.

The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens, is down 4.8% in the past 24 hours.

Futures trades betting on higher prices lost over $230 million in the past 24 hours, liquidations data tracked by CoinGlass shows. BTC and ETH-tracked futures saw over $60 million in long liquidations a piece, while products tracking DOGE, SOL, XRP, and pepe coin (PEPE) recorded at least $4 million in losses.

For long traders, these liquidations were the highest since late June. Crypto exchange Binance took over $110 million in liquidations, the most among counterparts.

Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader cannot meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

Such data is beneficial for traders as it serves as a signal of leverage being effectively washed out from popular futures products – acting as a short-term indication of a decline in price volatility.

Meanwhile, trading firm QCP Capital said in a Thursday broadcast on Telegram that they expect a dim market in the next few months.

“We anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release,” QCP said.