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

• Fears of sell pressure from Mt. Gox repayments and possible miner sales led to bitcoin dropping below $59,000, with major tokens like ether and Solana's SOL also declining.
• Trading firm QCP Capital anticipates a subdued market in the next quarter due to uncertainty around the Mt. Gox bitcoin supply release.

Fears of looming selling pressure on bitcoin BTC$106,940.91 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 BCH$475.27, 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$3,870.45 slumped 4%, while Solana’s SOL and dogecoin DOGE$0.1889 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.