Bitcoin suffered a blow to a one-month low on Friday and was leading for its worst week in six months as traders have booked profits from a long rally and have been under a spooky expectation that creditors of the collapsed crypto exchange Mt Gox can likely liquidate their payments.
Bitcoin witnessed a fall of 1.6% at $55,980 by mid-session in Asia. This has been 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. He expects that it could continue until the token finds support at nearly $53,000.
Reportedly, the largest cryptocurrency by market value, bitcoin has fallen by 14% for the week and through its 50-day moving average. Besides, it has gained more than 90% this year.
Dibb stated that profit-taking was involved along with concern over more selling during Tokyo court signing off on plans to repay creditors of Mt Gox, a crypto exchange that closed 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, expecting that those creditors are likely the sellers.
On the contrary, Ether was more or less stable with an about three-week low at $4,014 on Friday but is heading for a 14% weekly loss.
The sufferance of bitcoin and ether may also be due to the scene in the global market which is raising cautiousness in recent days amid concern over economic growth, interest rates, and inflation.
“Bitcoin’s long-term outlook remains bullish,” said OANDA analyst 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.”
