SINGAPORE (Reuters) – Bitcoin fell to a four-month low on Friday, breaking through technical support, as traders anticipated the sale of long-lost tokens from a defunct Japanese exchange and further selling by players fearful of momentum and leverage.
The price of the world’s largest cryptocurrency fell by more than 8% to $53,523, below chart support around $55,000 and the lowest level since late February.
The index has fallen about 12% so far this week, while many of the risk-sensitive assets it typically tracks, such as the Nasdaq, have risen.
Ether fell 9% to $2,841, its lowest level in more than two months.
According to media reports, Mt. Gox, the world’s largest cryptocurrency exchange before its collapse a decade ago, may return bitcoins to creditors, who are seen as likely sellers, given that the token was worth only hundreds of dollars in 2014.
“The selling pressure continues to stem from the sale by creditors of the failed Mt Gox exchange,” said Tony Sycamore, market analyst at IG.
“However, the acceleration of the downward trend indicates that the market wants to get ahead of the influx of lenders.”
Analysts are also concerned about the possibility that Joe Biden will be replaced as the Democratic presidential nominee by someone less pro-crypto after a rocky debate with rival Donald Trump.
Bitcoin had a strong start to the year after the launch of exchange-traded funds in the US, which propelled it to a record $73,803.25 in mid-March. However, it has struggled since then.
“An asset that has been in a range for a while and has recently been at the bottom of that range, there are plenty of positions that are margined,” said Justin D’Anethan of Keyrock, a digital asset market maker. These positions are being forced to sell as prices fall.
“This of course creates a domino effect, pushing prices down even further than they would in a less leveraged market.”
(Reporting by Ankur Banerjee, Tom Westbrook and Sameer Manekar in Singapore; Editing by Edwina Gibbs and Kim Coghill)
