Bitcoin fell to a one-month low on Friday and was on track for its worst week in six months, as traders booked profits from a long rally and were frightened by the possibility that creditors of the defunct crypto exchange jobs Mt Gox would liquidate their payments.
Bitcoin, the most valuable cryptocurrency by market capitalization, was down 1.6 percent at $55,980 by mid-session in Asia, its lowest since mid-October and 20% below last week’s record high. “Selling pressure has been quite constant,” said Matthew Dibb, chief operating officer at Singapore-based crypto asset manager Stack Funds, who expects it could continue until the token finds support at around $53,000.
Dibb stated that there was profit-taking and concern about more selling following a Tokyo court’s approval of plans to repay creditors of Mt Gox, a crypto exchange that collapsed in 2014 after losing half a billion dollars in bitcoin. “Those affected will receive a large sum of bitcoin, likely happening in Q1 or Q2 of 2022. This has brought some fear into the market on a longer-term horizon,” he said, on the expectation that those creditors are likely sellers. For the week, bitcoin has fallen 14% and through its 50-day moving average. It has gained more than 90% this year.
Ether, the second-largest cryptocurrency by market capitalization, was steady near a three-week low of $4,014 on Friday, but was on track for a 14% weekly loss. Both ether and bitcoin appear to have suffered as global markets have become more cautious in recent days due to concerns about economic growth, interest rates, and inflation.
“Bitcoin’s long-term outlook remains bullish,” said OANDA analyst jobs Edward Moya. “But the waters over the next few months will be rough as institutional investors look to see if the Fed will be forced to raise rates sooner and trigger a broad-based selloff of risky assets that include bitcoin.”