Mt. Gox effect? Bitcoin dominance is plummeting
Bitcoin is usually less volatile than the rest of the market, but that has been very different over the past 24 hours. The Bitcoin price took a heavy hit after it was announced that the Mt. Gox is about to return billions of dollars worth of Bitcoin to its users.
The Mt. Gox effect knocks Bitcoin down
Bitcoin’s dominance fell 1.8% to 54.34%. That drop marks the biggest daily decline since January 12.
What does this mean? Especially that investors are currently withdrawing their money from Bitcoin faster than other currencies. Bitcoin even fell below $59,000 last night and is in huge trouble.
The main reason for the decline seems to be the news about Mt. Gox. The fallen exchange platform plans to hand out 140,000 Bitcoin to its former users. They will get that Bitcoin back in July.
Many people apparently expect that the long-time users of Mt. Gox is selling their Bitcoin en masse. In addition to the “bad news” about the Mt. Gox Bitcoin are also selling miners and ETFs.
Andrew Kang is extremely bearish
Mechanism Capital’s Andrew Kang is quite bearish on Bitcoin right now. “With Mt. Gox, the German government selling Bitcoin and ETFs that are emptying, I expect the support points in the chart to break.
There also seems to be a local top for Nvidia. The only buyers at the moment seem to be using leverage (borrowed money) and short-term traders are trying to catch the falling knife.
These types of price movements usually end in a cascade of several billions. That will be the signal,” said Andrew Kang.
According to Kang, this cycle is very similar to the summer of 2021. At that time, the Bitcoin price also fell sharply after a long period of increases. Everyone expected an upturn, but it didn’t happen.
Ultimately, it took quite a while before Bitcoin managed to pick up the positive momentum again. He is still bullish for the long term. For example, he predicts the ultimate top for Bitcoin of this cycle in 2025. In that respect, he says, it is mainly a matter of being patient at the moment.
