Bitcoin Plummets Towards Biggest Weekly Fall in Over a Year

 Bitcoin Plummets Towards Biggest Weekly Fall in Over a Year

Bitcoin is headed for its largest weekly decline since November 2022, plummeting over 12% as traders worry about the potential dumping of tokens from defunct Japanese exchange Mt. Gox and further selling by leveraged players.

Price Slumps to Lowest Since Late February

The cryptocurrency’s price slid 8% on Friday to $53,523, its lowest point since late February. Rival token Ether also fell 9% to a two-month low of $2,841.

Mt. Gox Creditor Selling Sparks Selling Pressure

Media reports suggest Mt. Gox may start returning bitcoin to creditors, who are likely to sell, putting pressure on the market.

Leveraged Selling Accelerates Downside

Analysts note that the acceleration of the downside suggests the market is trying to get ahead of creditor flows, with leveraged selling exacerbating the decline.

Fraying Correlation with Mainstream Equities

Unlike US stocks and global equity indexes, which are at or near record highs, Bitcoin’s correlation with mainstream equities appears to be weakening.

Strong Start to the Year Followed by Struggles

After a record high in mid-March, Bitcoin has struggled, with rangebound trading and leveraged positions contributing to the sharp decline.

Cascading Effect of Margined Positions

The large number of margined positions in the market has created a cascading effect, pushing prices further down than expected.

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