Mt. Gox’s Bitcoin repayment for customers who lost 850,000 BTC might worsen the already struggling prices. The token faces challenges in dealing with the sell-the-news crowd post-January 11 ETF approval.
Mt. Gox, once a major Bitcoin exchange, suffered a security breach in 2014, leading to the loss of 850,000 BTC and one of the largest 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 October 2024. Bitcoin price currently faces pressure after failing to rally following the SEC’s approval of spot BTC ETFs.
Mt. Gox Repayment Emails and Potential Impact on Bitcoin Prices
Customers of the now-defunct Mt. Gox exchange have reported receiving emails requesting confirmation of identity and account details. The trustee overseeing the exchange is verifying creditor identities and confirming account details on cryptocurrency exchanges, part of the Mt. Gox repayment process, with BTC tokens valued at close to $3 billion.
Mt. Gox has contacted former customers via email concerning their Bitcoin repayment.
Noteworthy exchanges involved in the repayment process include Bitstamp and Kraken, with confirmation emails predominantly from Bitstamp users. While positive for creditors, the Mt. Gox repayment may pose challenges for Bitcoin prices. The release of a substantial amount of BTC tokens to creditors could boost market liquidity.
The potential sale of received BTC by creditors might increase the Bitcoin supply, putting downward pressure on prices if demand remains constant. However, resolving the longstanding Mt. Gox issue could instill confidence in the market, attracting new buyers. The anticipation of a US Federal Reserve interest rate cut and the upcoming halving event could further influence Bitcoin prices. Current bearish pressure on BTC, despite positive cues, underscores its dependence on external factors.
Potential Impact of Mt. Gox Repayment on BTC Prices
Despite overall bullish signals and positive sentiment surrounding BTC prices, the Mt. Gox repayment plans carry the potential to trigger a drop to the $30,000 price level. BTC experienced a 4% decline, reaching a daily low near $38,500 on January 23, with a subsequent recovery.
BTCUSD daily price chart with RSI. Source: Tradingview.com
If the Mt. Gox repayment plans generate Fear, Uncertainty, and Doubt (FUD), BTC prices could decline to the support around $38,200. Further breach of immediate support may prompt bulls to defend the $35,800 support level.
Conversely, increased investor confidence could propel BTC prices to rally towards the 50-day Exponential Moving Average (EMA) resistance at approximately $42,000. Surpassing the immediate resistance might lead the cryptocurrency to approach the resistance near $45,150 before any corrections. On the daily charts, the Relative Strength Index (RSI) for BTC remained neutral, registering a score of 34.81.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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