Why is Bitcoin price down today?

Nancy Lubale4 hours agoWhy is Bitcoin price down today?Bitcoin price is down today as Mt. Gox shifts more BTC and creditors confirm that they received their repayments at the Kraken exchange.1389 Total views4 Total sharesListen to article 0:00Markets NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksOn July 24, Bitcoin (BTC) dropped over $1,400 within two hours, pushing its 24-hour losses to 2.1%. Mt. Gox’s ongoing repayments to creditors may have played a major role in this decline.BTC/USD hourly chart. Source: TradingView

Let’s have a closer look at the factors driving Bitcoin price lower today.Mt. Gox begins 140K Bitcoin reimbursement

Today’s Bitcoin price drop appears against the backdrop of the commencement of Mt. Gox’s reimbursement of its creditors with over 140,000 BTC, worth approximately $8.5 billion.

Notably, according to a Telegram group of Mt. Gox creditors, creditors of the defunct crypto exchange began receiving Bitcoin and Bitcoin Cash (BCH) repayments on the Kraken crypto exchange on July 23.

These repayments come after the Japan-based crypto exchange moved over 47,500 Bitcoin, worth almost $3.2 billion, to two unknown addresses on July 23.

Simultaneously, the US government moved 58.74 BTC, worth nearly $4 million, to Coinbase Prime, raising speculation about its purpose.

According to Arkham Intelligence data, Mt. Gox’s BTC holdings now stand at around 85,234 BTC, worth $5.70 billion.Source:Arkham Intelligence

Following the defunct exchange’s repayments statement on July 5, it established plans to “promptly” carry out repayments to creditors that seem well underway.Data showing 47,600 BTC leaving the Mt. Gox address. Source: Arkham Intelligence

The Mt. Gox wallet labeled “Mt. Gox: Cold Wallet (1Jbez)” sent 48,641 BTC worth around $3 billion to Kraken on July 16 to disseminate to creditors.

The exchange expected creditors to retrieve their funds within one to two weeks.

Mt. Gox’s creditors have been awaiting reimbursement for over a decade, during which BTC’s price has surged by more than 10,000%. The fear of this additional Bitcoin supply witnessing selloffs immediately upon entering circulation has exerted downward pressure on the market.Hong Kong launches Bitcoin Futures Inverse ETF

Hong Kong launched Asia’s first Bitcoin futures inverse product, the CSOP Bitcoin Future Daily (-1x) Inverse Product (7376.HK), on July 23.

The new exchange-traded fund (ETF) by CSOP Asset Management — one of the largest asset managers in China — aims to offer investors a method of profiting from declines in the price of Bitcoin.

The ETF achieves this by taking short positions on future contracts for Bitcoin from the Chicago Mercantile Exchange (CME). Its value increases when Bitcoin’s price drops, providing a way to bet against Bitcoin’s performance. It is denominated in US dollars and traded on the Hong Kong Stock Exchange (HKEX).

This development follows the successful launch of the CSOP Bitcoin Futures ETF (3066.HK) in December 2022, continuing the firm’s expansion in the Asia-Pacific region.

The launch of Hong Kong’s Bitcoin futures inverse ETF could exert overhead pressure on Bitcoin’s price by providing a new tool for investors to bet against Bitcoin, potentially increasing selling activity.

Related:Bitcoin trader warns of local BTC price top after $530M ETF inflowsOver $150 million leveraged longs liquidated

Bitcoin’s price decline today follows massive liquidations of long positions in the crypto futures market.

Notably, the broader market witnessed over $159 million in long liquidations in the past 24 hours, compared to $40 million in short liquidations. Similarly, more than $24 million long BTC positions have been liquidated over the same period, against $13.93 million short liquidations.

Long liquidations occur when traders are forced to sell their assets to exit their long positions, which increases the selling pressure in an already bearish market.Total crypto market liquidations. Source: Coinglass

Interestingly, the wipeout of long positions coincides with a decline in Bitcoin futures’ open interest (OI) and funding rates. Additional data from Coinglass reveals that the total number of BTC’s open futures contracts was $36.75 billion as of July 23, down from $37.2 billion a day ago. Meanwhile, its funding rate dipped from 0.24% per week to 0.12% per week over the same period.

The decrease in funding rates and OI suggests that traders are avoiding taking new risks, reflecting a more cautious market outlook.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Cryptocurrencies# Federal Reserve# Central Bank# Bitcoin Price# Bitcoin Regulation# Markets# Cryptocurrency Exchange# Interest Rate# BTC MarketsAdd reaction