Analysts name reasons for bitcoin’s sudden drop below $ 58,000

The flagship of the cryptocurrency market has dropped to $ 57,874 on Coinbase. This was the first time in more than two months. Since the fall, bitcoin’s value has been fixed at $ 58,900 at the time of writing.

According to TradingView, BTC $56,704.78 Bitcoin 3.19% Market capitalization $1.12 trillion VOL. 24 hours $1.99 billion dropped by 3.4% overnight and by 3.5% over the week. Bitcoin’s drop came after millions of dollars worth of leveraged long positions were destroyed.

This hurt traders who were hoping for a price increase. According to CoinGlass, more than $ 54.9 million in long positions on bitcoin have been liquidated in the last 24 hours.

Much of the blame for the BTC price drop lies with the bankrupt cryptocurrency exchange Mt. Gox, which is set to start paying creditors this month. About 20,000 people will be compensated, and the total amount of payments will be approximately 140,000 bitcoins (about $ 8.5 billion at the current exchange rate).

It is expected that most users will choose to receive payments in cryptocurrency rather than fiat money to avoid high capital gains taxes in many jurisdictions. This will allow them to save significant amounts of money by keeping the bitcoins they receive on their wallets.

JPMorgan Chase analysts have warned that the massive sale of bitcoins by Mt. Gox creditors could lead to a short-term decline in the price of this cryptocurrency in July, but the market is expected to recover in August.

However, some analysts believe that the payouts may not be as bad for bitcoin as others expect. Among the optimists is Tom Lee, managing partner and head of research at Fundstrat Global Advisors. He believes that Mt. Gox payments will lead to a sharp rise in the BTC. In a new interview with CNBC, Lee said that the market leader could reach $ 150,000 in 2024, which is more than 137% more than its current value.