Today, Bitcoin price has fallen below $57,000 (€52,000), a level it hasn’t seen since early May. The price is now also below the crucial 200-day moving average of $58,492.

The world’s largest cryptocurrency has now seen three consecutive days of declines, raising concerns among investors and analysts alike. According to market experts, the sudden price drop can be attributed to several factors. In this article, we’ll explain what’s going on.

German government continues to sell large amounts of Bitcoin

One of the reasons for the price drop is the transfer of approximately 1,300 BTC by the German government, worth $75.53 million, to major cryptocurrency exchanges Bitstamp, Coinbase and Kraken.

According to blockchain analytics firm Arkham, this is the largest transfer to centralized exchanges in recent times, which likely contributed to the increased selling pressure.

Mt. Gox refunds cause market unrest

The market is further influenced by the expected Mt. Gox refunds, which are set to begin in early July. According to data from Arkham Intelligence, several wallets linked to Mt. Gox made small Bitcoin transactions earlier today. It is the first time in a week that these wallets have been active.

Some of the Bitcoin was sent to a wallet identified by Arkham as belonging to Bitbank, one of the exchanges selected to handle the repayments to Mt. Gox creditors. Arkham Intelligence reported that the transactions involved three wallets at the bankrupt exchange, with the largest transfer being approximately $24. This is believed to be a test transaction in preparation for the substantial customer repayments planned for this month.

This long-awaited distribution will return over $9.4 billion worth of Bitcoin to approximately 127,000 creditors who have been waiting for compensation for over a decade. The influx of such a significant amount of Bitcoin into the market could put further downward pressure.

The price drop causes liquidations in the derivatives market

Bitcoin’s recent price drop has caused a wave of liquidations in the derivatives market. According to data from CoinGlass, Bitcoin liquidations have reached $100.4 million, with over $86 million in leveraged long positions being forced closed.

According to 10x Research, $60,000 was a key level for Bitcoin miners and Bitcoin Spot ETF buyers, and also largely marked the bottom of the quarterly trading range.

“Only uninformed traders are willing to buy here. Breaking this support could trigger a sharp drop to the low $50,000s,” the report said.

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