Bitcoin news update
Bitcoin (BTC) plunged below $58,000 in European morning hours, extending 24-hour losses to nearly 5% and reaching levels not seen since early May. The sell-off was triggered by activity in wallets linked to the defunct crypto exchange Mt. Gox and the German Federal Criminal Police Office moving over $75 million to crypto exchanges.
“Among the top reasons for the price drop was the German government moving more than $50 million to crypto exchanges, creating sell speculation in the market,” said Lucy Hu, a senior analyst at crypto investment firm Metalpha, in a Telegram message.
Mt. Gox is set to begin distributing assets stolen from clients in a 2014 hack this month, although the exact timing remains uncertain after years of postponed deadlines. The repayments will be made in bitcoin and bitcoin cash (BCH), potentially adding selling pressure to both markets.
Wallets tracked by Arkham showed Mt. Gox wallets conducted test transactions during the Asian morning, moving a total of $25 worth of bitcoin across three transactions to different wallets. Large token holders often move small amounts between wallets before larger transfers, which may indicate an intention to sell.
Arkham data also revealed the German entity moved $175 million in BTC to various wallets, with $75 million sent to crypto exchanges Kraken and Coinbase. Arkham CEO Miguel More previously told CoinDesk that transfers from a wallet to an exchange might indicate an intent to sell tokens.
Meanwhile, bitcoin has fallen below a widely followed technical indicator for the first time since October, signaling a potential downtrend in the months ahead.
