Bitcoin Rises to $59K After $1 Billion Blow to New Whales

Shalini Nagarajan

Last updated:

July 10, 2024, 02:19 EDT | 1 min read

Bitcoin rebounded after a week of declines to trade over $59,000 on Tuesday, but remains 5% lower than last week.

Analysts linked the recent drop in Bitcoin to collapsed exchange Mt. Gox beginning creditor repayments.

Investors may have to wait up to 90 days to access their funds. Nevertheless, the confirmed repayments, evidenced by the transfer of 47,228 BTC from a Mt. Gox-associated cold wallet to a new address likely meant for repayments, sparked market reactions.

German Authorities Sell Seized Coins, Then Recover Millions

Another trigger is German law enforcement transferring large bitcoin amounts to exchanges.

Earlier this year, the German Federal Criminal Police Office confiscated 49,857 BTC from the operators of Movie2k.to, a piracy website last active in 2013. Since mid-June, the government has sold more than 10,000 BTC, exerting downward pressure on the Bitcoin’s market price.

Subsequently, investors who believe that the market may have overreacted may have seen this as an opportunity to buy at a discount.

Relatedly on Tuesday, German authorities got back over $200m worth of cryptocurrency from exchanges, aiding the market’s recovery.

New Bitcoin Whales Suffer $1 Billion Losses in Two Weeks

According to CryptoQuant’s research head Julio Moreno, new Bitcoin whales have lost around $1b in the past two weeks. These new investors had previously made profits in the first quarter of this year. In contrast, longer-term Bitcoin investors cashed out their profits in early June.

New #Bitcoin whales are now realizing losses, $1B in the last two weeks.
Previously they sold at a profit in Q1.

Old whales realized profits at the start of June. pic.twitter.com/Pv3PhgnFEc

— Julio Moreno (@jjcmoreno) July 9, 2024

The recent drawdown has notably decreased the amount of unrealized profits, mainly due to selling by long-term holders. The MVRV ratio, which compares market value to realized value, is now about 1.5. This indicates that, on average, market participants have an unrealized profit of 50%.

This trend indicates that the recent price movement was largely driven by long-term holders who took profits. They sold their coins to new buyers at higher prices. This activity has lowered the average unrealized profit across the network.

Bitcoin (BTC) closed last week at approximately $55,850, reflecting an 11% drop from the prior week’s closing price of around $62,775. Strong selling pressure was evident throughout the week. BTC traded as low as $53,500 on Thursday, then rebounded to $58,250, before finally closing at $55,850.

Follow Us on Google News