‘Scary’ Crypto Crash Causes ‘Extreme Fear’ Panic After $2 Trillion Bitcoin, Ethereum, XRP, Solana Price Drop

07/06 update below. This post was originally published on July 04

has fallen to $50,000 per bitcoin after Federal Reserve Chairman Jerome Powell warned of a “critical period.”

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Bitcoin price has fallen by around 25% over the past month, with Bitcoin, Ethereum and XRP combined
solana and the crypto market are approaching a market cap of $2 trillion for the first time since early February, down from nearly $3 trillion in March.

Now, after a legendary tech billionaire said he thinks bitcoin could replace the US dollar, collapsed bitcoin exchange Mt. Gox has begun moving what could be a tidal wave of bitcoin.

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“On July 5, 2024, the [Mt. Gox] “The Rehabilitation Administrator has made repayments in Bitcoin and Bitcoin Cash to some of the Rehabilitation Creditors through a portion of the designated cryptocurrency exchanges etc. in accordance with the Rehabilitation Plan,” read a letter addressed to “whom it may concern” posted on the Mt. Gox website.

Shortly after the document was posted, it became unavailable. The reason for this was not immediately clear.

Earlier, Bitcoin and crypto analysts from Arkham
According to Intelligence, nearly 50,000 bitcoins worth about $2.7 billion managed by Mt. Gox were moved to another wallet, a sign that the crypto could soon be distributed to creditors.

“Should another 200,000 bitcoins come into the market in a short period of time, worth over $10 billion, supply will likely exceed demand and we could see the price of bitcoin fall even further,” Neil Roarty, an analyst at investment platform Stocklytics, said in emailed comments.

In late June, Mt. Gox trustees announced that the exchange, which collapsed 10 years ago, would distribute nearly $10 billion in funds in bitcoin, bitcoin cash and fiat currencies to its creditors in early July.

Update 07/06: The Bitcoin price crash has bottomed as the broader crypto market recovers slightly after this week’s sharp sell-off.

However, traders and analysts still fear that the crash in bitcoin price could send ethereum, XRP, solana and other major cryptocurrencies lower.

The widely followed Crypto Fear & Greed Index, compiled by data site Alternative.me, has fallen to its lowest level since January 2023, just after the bitcoin price fell to just $17,000 following the implosion of crypto exchange FTX, and is now teetering on the brink of “extreme fear”.

“The cryptocurrency market cap has fallen below $2 trillion, accelerating the decline and losing over 8%, while many altcoins have seen double-digit losses in the past 24 hours,” Alex Kuptsikevich, senior market analyst at FxPro, said in emails, calling the bitcoin price crash “scary.”

“Bitcoin’s 200-day moving average failed to act as support and we saw an acceleration in the sell-off after a breakout below this line,” Kuptsikevich wrote, adding that Ethereum’s price situation “looks like a pause for a new downward momentum that could take the price back to $2,300.”

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“The direction of bitcoin in the coming days will be determined by the selling pressure from Mt. Gox users,” Rachel Lin, the CEO of decentralized exchange SynFutures, said in emailed comments.

“The market expects most Mt. Gox users to dump their tokens, but we could see a rebound if selling is lower than expected. On the other hand, if there is enough selling to push the price down, we could be looking at the $50,000 level soon.”

Lin warned that the “crucial levels” for bitcoin and ethereum were $60,000 and $3,350 respectively – both levels have now been “definitely” broken.

“As expected, Bitcoin’s decline has dragged down all other assets,” Lin said. “Ethereum
has dropped almost 9% this week, while most memecoins are down 10% to 20%.

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