The cryptocurrency market has suddenly suffered a bloodbath.
On the morning of July 8th, the virtual currency market suddenly plummeted across the board, with Bitcoin prices dropping below $55000 per coin at one point, with a maximum intraday decline of over 6%. It is now reported at $54918 per coin, and the top 10 cryptocurrencies in terms of total market value have collectively suffered a sharp decline, with Ethereum falling more than 6% and Dogecoin falling more than 10% at one point. Data shows that in the past 24 hours, over 81000 people have sold out in the virtual currency market.
On the news front, the cryptocurrency market is currently facing a fierce sell-off trend. According to IntoTheBlock data, since June this year, virtual currency mining companies have sold Bitcoin worth over $2 billion, the highest in over a year.
Meanwhile, the Japan Cryptocurrency Exchange Mt Gox announced that it will begin repaying the huge cryptocurrency losses suffered by users in July. It is estimated that the total value of this batch of cryptocurrencies is about 9 billion US dollars (approximately 65.4 billion yuan), including approximately 140000 bitcoins. Industry insiders believe that after creditors receive compensation, there will inevitably be a wave of selling, which may cause panic among other investors. Subsequently, they follow up on selling Bitcoin, and it is expected that the price trend of Bitcoin will further deteriorate in the coming days.
Full line plummet
On the morning of July 8th, the virtual currency market suddenly plummeted across the board, with Bitcoin prices dropping below $55000 per coin at one point, with a maximum intraday decline of over 6%. It is now reported at $54918 per coin, with a cumulative decline of over 23% compared to the high point in early June this year.
At the same time as Bitcoin's "flash crash", the virtual currency market has suffered a "bloodbath", with the top 10 cryptocurrencies in total market value collectively plummeting. Among them, Ethereum fell by over 6%, and Dogecoin plummeted by over 10% at one point.
According to CoinGlass data, over 81000 people in the virtual currency market have been liquidated in the past 24 hours, with a total amount of approximately 210 million US dollars (equivalent to over 1.5 billion yuan).
On the news side, currently, virtual currency mining companies are selling on a large scale. According to IntoTheBlock data, since June this year, miners have sold Bitcoin worth over $2 billion, the highest in over a year. At present, the amount of Bitcoin held by miners has dropped to the lowest level in 14 years.
The continued selling of Bitcoin miners may be affected by the expected decline in mining revenue. The income of miners mainly comes from two sources: mining rewards and transaction costs. The halving event in April this year directly affected the mining rewards for "miners", but the operating costs of "miners", such as electricity and equipment costs, did not decrease but increased, leading to a large number of "miners" facing profitability difficulties.
The income of Bitcoin miners has hit a historic low in the past two months. According to Kaiko data, the total income of miners has decreased from an average of $107 million per day before halving to $30 million. In addition, the "hash price", an indicator of the profitability of miners per unit of computing power, has continued to decline. Currently, the average mining revenue calculated by hash is $0.049 per EH/s, approaching a historical low.
According to f2pool data, as Bitcoin's trading price drops below $58000, inefficient mining machines are facing challenges under current market conditions.
Analysts believe that the latest actions of Binance, the world's largest cryptocurrency exchange, may also have an impact on the sentiment of the virtual currency market.
Binance will cease trading services for the following six currency pairs: BTC/AEUR ETH/AEUR、AI/TUSD、CHR/BNB、GAS/FDUSD、LQTY/FDUSD， The revision will take effect on July 5th. The company did not disclose specific reasons, but only reminded that it will regularly review all listed spot trading pairs and delete some trading pairs in the event of poor liquidity or other factors.
Intense sell-off trend
Recently, the Japan Cryptocurrency Exchange Mt Gox announced that it will begin repaying the huge cryptocurrency losses suffered by users in July. Due to its similar pronunciation, the Mt. Gox exchange is known as the "Mentougou Exchange" by people in the domestic cryptocurrency industry. This exchange was once one of the largest cryptocurrency exchanges in the world, but suffered huge losses in 2014 due to hacker attacks and ultimately filed for bankruptcy.
Responsible for supervising Ms The court appointed trustee for the bankruptcy proceedings of the Gox exchange announced that starting from July, funds will be returned to approximately 20000 creditors in the form of Bitcoin and Bitcoin cash. It is estimated that the total value of this batch of cryptocurrencies is about 9 billion US dollars (approximately 65.4 billion yuan), including approximately 140000 bitcoins.
Arkham Intelligence, a blockchain analysis company, recently announced that the Mt. Gox exchange has transferred 47000 bitcoins to a new wallet address, with a current price value of approximately $2.6 billion (approximately RMB 19 billion).
Mt Gox was once the world's largest Bitcoin exchange, with a peak market share of 70% in Bitcoin trading. In February 2014, Mt. Gox announced the cessation of all Bitcoin withdrawals, and according to an internal document at the time, hackers attacked Mt Gox， Stolen 850000 Bitcoins. Affected by this incident, the price of Bitcoin plummeted by over 60% at one point.
Industry insiders believe that Bitcoin has risen nearly 74 times since 2014, and there will inevitably be a wave of selling pressure after creditors receive compensation. Especially for those who hold a large amount of Bitcoin, they are more likely to take some profits and may trigger panic among other investors, who may then follow suit and sell Bitcoin.
Looking back, in June of this year, the bankrupt cryptocurrency exchange Gemini returned over $2 billion worth of Bitcoin to users, causing a sharp drop in Bitcoin prices.
JPMorgan analysts predict that, like Gemini users, users of Mt. Gox will also be inclined to sell some of the Bitcoin they receive to profit from it. The price pressure is only temporary, and it is expected that Bitcoin prices will begin to rebound from August this year.
In addition, the German government is also one of the "bears" in the cryptocurrency market, continuously transferring and selling Bitcoin to major exchanges.
According to blockchain data, the German Federal Criminal Police transferred 400, 500, and 400 bitcoins to Kraken, Bitstamp, and Coinbase exchanges on July 4th, with a total value of approximately $75 million. Its holdings of Bitcoin have decreased from 50000 on June 29th to 42274, selling a total of 7726 Bitcoins worth approximately $450 million (approximately 3.3 billion yuan).
Faced with the continuous decline of cryptocurrencies, Sun Yuchen, the founder of Tron, shouted that he is willing to negotiate with the German government to buy all of his Bitcoin holdings off the exchange to minimize the impact on the market.
EToro market analyst Josh Gilbert said in an interview with Cointelgraph that it is expected that the price trend of Bitcoin will further deteriorate in the coming days. The current bearish news far outweighs the bullish, and the selling activity clearly makes investors feel uneasy, which often leads to more selling.
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