NEW DELHI (CoinChapter.com) — Mt. Gox’s Bitcoin repayment of customers who lost a combined 850,000 BTC might spell more trouble for the already hurting prices. Notably, the token has struggled to cope with the sell-the-news crowd after the Jan. 11 ETF approval.
Mt. Gox was a major Bitcoin exchange in 2010, handling about 70% of all BTC transactions. A security breach in 2014 led to the loss of 850,000 BTC, marking one of the biggest bankruptcies in the crypto industry.
The planned repayment involves returning 142,000 BTC, 143,000 Bitcoin Cash (BCH), and approximately $510 million to creditors by Oct. 2024. Bitcoin price is currently under pressure after it failed to rally following the SEC’s approving spot BTC ETFs.
Mt. Gox Customers Receive Email Regarding Repayment
Some customers of the now-defunct crypto exchange reported receiving an email asking for confirmation of identity and account details.
The emails indicate that the trustee in charge of the exchange is now verifying creditor identities and confirming account details on cryptocurrency exchanges. The total worth of the BTC tokens that are part of the Mt. Gox repayment is close to $3 billion.
Major cryptocurrency exchanges like Bitstamp and Kraken are part of the Mt. Gox repayment process. Interestingly, most confirmations of the emails are from Bitstamp users, with a few Kraken users also making it to the list.
While good news for creditors, the Mt. Gox repayment could spell trouble for Bitcoin prices. The release of the huge trove of BTC tokens to creditors could increase market liquidity.
Moreover, if the creditors opt to sell the BTC they receive from the Mt. Gox repayment package, it could increase the supply of Bitcoin in the market. An increased supply could drive BTC prices down, given that the demand remains the same.
However, resolving the long-standing issue might boost investor confidence in the cryptocurrency market, attracting new buyers to the sector. Furthermore, with the US Federal Reserve likely to cut interest rates in the first half of 2024, BTC could attract more investors.
BTC price is currently facing intense bearish pressure after the launch of several spot exchange-traded funds (ETFs) earlier this month. The token buckling to bearish pressure despite a major bullish cue highlights BTC’s dependence on macro and external cues.
Additionally, the upcoming halving event could favor a BTC price rally. These factors might either amplify or mitigate the effects of the Mt. Gox repayments on Bitcoin prices.
BTC Price Struggling To Remain Above $39k
Despite the bullish cues and general optimism around BTC prices, the Mt. Gox repayment plans can potentially force BTC price to drop to the $30,000 price tag. The prime crypto dropped 4% to a daily low near $38,500 on Jan. 23 before recovering later in the day.
If the Mt. Gox repayment plans create FUD, BTC price could drop to the support near $38,200. Moreover, breaching the immediate support might force bulls to defend the support near $35,800.
On the other hand, increased investor confidence could help BTC price rally to its 50-day EMA (purple wave) resistance near $42,000. Breaching the immediate resistance would likely help the prime cryptocurrency token reach the resistance near $45,150 before correcting.
The RSI for BTC remained neutral, with a score of 34.81 on the daily charts.
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