Proactive Investors - Bitcoin (BTC) briefly tipped across the $70,000 price point on Monday following a week of mediocre performance for the world’s largest cryptocurrency.
But today has seen a rather sharp reversal with the BTC/USD pair dropping 1.7% to trade at $68,193 at the time of writing.
Analysts have pointed out a large-scale bitcoin transfer, estimated at $7 billion, from wallets owned by Mt Gox, the cryptocurrency exchange that collapsed a decade ago.
Creditors of the once-prominent crypto exchange are poised to be partially repaid after a full ten years in the dark, though this may come with considerable selling pressure.
Neil Roarty, analyst at investment platform Stocklytics, explained: “Why is this important? Well, the supply and demand dynamics of Bitcoin have been favourable to bulls recently. April’s halving event reduced the number of new Bitcoin entering circulation, while the launch of ETFs at the start of the year increased institutional demand.
“But the more than 100,000 previously dormant bitcoin that Mt. Gox’s trustees could imminently unleash on the market may swing the scales.
“Remember, fewer than 20 million bitcoins exist right now, but roughly a third of those haven’t been traded for more than five years.
“A further portion is believed lost forever; that could be anywhere from two to six million Bitcoin.
“Suddenly 100,000 looks like more than a drop in the ocean, and bulls may need to find new sources of demand if they want to break that $70,000 ceiling for a prolonged period.”
Creditors are not expected to receive their funds until October. In the meantime, speculation over the bearish effects of the event may cause volatility in the spot markets.
Ethereum, on the other hand, continues to steer ahead following the approval of spot-ether exchange-traded funds in the US.
Similar to spot-bitcoin ETF approvals in January, the development is seen as a strong catalyst for ether prices.
The ETH/USD pair is currently trading 3.2% higher week on week compared to a 4.1% loss on the BTC/USD pair.
Most of the large-cap altcoin set remains in the red, with Solana (SOL), Ripple (XRP), BNB and Cardano (ADA) posting single-digit week-on-week losses.
Global cryptocurrency market capitalisation currently stands at $2.57 trillion, with bitcoin dominance at 52.3%.