Bitcoin Crash: Understanding Mt. Gox BTC Payments Threat As $46,000 Calls

Bitcoin struggled for support above $60,000 for the second day this week while select altcoins including meme coins like dogwifhat, popcat, and Bonk rallied in impressively in double-digit gains. The wave of declines being witnessed come as a result of a combination of factors including the defunct exchange Mt. Gox, which is set to begin distributing payments to creditors in Bitcoin and Bitcoin Cash (BCH). Due to the potential volatility likely to emanate from this exercise, a Bitcoin crash cannot be ruled out.

As Bitcoin and altcoins search for liquidity and bottoms, investors are counting losses. The wave of declines will likely become stronger following a new report regarding the defunct exchange Mt. Gox set to begin distributing payments to creditors in Bitcoin and Bitcoin Cash (BCH).

Bitcoin Crash Intensifies As Mt. GOX Schedules Payments

Mt Gox, once a dominant Bitcoin exchange (handling over 70% of trades), rose to fame in 2010. However, by 2014, it shut down after admitting to losing hundreds of thousands of Bitcoins due to hacks and mismanagement.

The event significantly impacted the early cryptocurrency market, leaving many investors counting dumbfounding losses. After a decade of the bankruptcy process, the Rehabilitation Debtor (Mt Gox Co., Ltd) and the Rehabilitation Trustee (Nobuaki Kobayashi Attorney-at-law) have announced the commencement of payments which will be done in BTC and BCH.

According to the press statement released on June 24, the Trustee “has completed the exchange and confirmation of the required information for implementing the payments.”

The payments set to kick off on July 2 sent jitters across the crypto market as investors feared heightened volatility. Bitcoin and altcoins are already facing strong headwinds due to macro factors like interest rate cuts and investor weariness.

Data by CoinGecko shows Bitcoin price trading at $61,038, down 5% in 24 hours, 7% in seven days and 12% in a month. Ethereum price had also run into strong headwinds, losing 5% of its value to $3,315 on Monday. Due to the rampant losses, the total market cap corrected to $2.359 trillion from $2.785 trillion posted on June 5.

Bitcoin Faces Unprecedented Risk As Downtrend Points To $46,000

Support at $60,000 is critical for the much-needed trend reversal. However, the formation of a double top pattern around $70,000 escalates the risk of Bitcoin diving to $46,000.

On top of the double-top pattern which could become active if $60,000 support is breached, a death cross pattern on the same daily chart points to more pain. When this pattern comes into the picture, it hints at a sustained downtrend.

This downward price action coincides with the oversold Relative Strength Index (RSI). With the RSI below 30, bulls have a limited chance to stop declines at $60,000. Otherwise, Bitcoin may be forced into an extended spiral bringing into effect the double-top pattern targeting $46,000.

A few factors could help with Bitcoin’s recovery including the soon-to-start trading Ethereum ETF. Should market sentiment improve, and investors regain confidence in buying dips, BTC will be up for a stronger trend reversal to above $70,000 and to new all-time highs.