The crypto market is experiencing rough times with Ethereum (ETH) and Bitcoin (BTC) both facing downward pressure. As of today Ethereum price stands at $2,868.32 marking a substantial 11.15% decline over the last 24 hours. The second largest crypto by market cap has seen its valuation drop to $345 billion while its 24-hour trading volume has surged by 57.27% to $28 billion.
Meanwhile Bitcoin has fallen below $54K following news that Mt. Gox, a collapsed Japanese crypto exchange, transferred $2.7 billion worth of Bitcoin from its cold storage wallets. This move comes as part of Mt. Gox's scheduled plan to repay creditors with a total of $8.5 billion in Bitcoin slated for distribution.
The transfer of 47,229 Bitcoin to a new wallet address at 12:30 am UTC on July 5 has raised concerns among market participants. Some fear that a potential sell-off by Mt. Gox creditors could further destabilize the market. However analysts suggest that the actual amount of Bitcoin likely to be sold is closer to $4.5 billion.
Adding to the market uncertainty the German government has recently transferred over 3,000 Bitcoin worth approximately $173 million to multiple locations. On July 4 blockchain investigator PeckShieldAlert reported that a wallet linked to the German government sent 1,300 Bitcoin (valued at $75 million) to three major crypto exchanges: Coinbase, Kraken and Bitstamp. An additional 1,700 Bitcoin was moved to a separate wallet address.
These large scale transfers from government entities coupled with the impending Mt. Gox repayments have introduced significant selling pressure on Bitcoin and the broader crypto market.
Ethereum's recent price action indicates that the downside is not over yet. The crypto recently broke down from a bullish flag pattern after reaching a high of $3,973 on May 27th. The breakdown and subsequent close below the flag pattern have invalidated the near-term bullish pressure.
Currently ETH price is resting at a support level and may potentially rebound. However technical indicators paint a bearish picture. The daily RSI stands at 23 placing it in oversold territory. This suggests extremely bearish momentum in the short term.
The MACD indicator is also bearish with the MACD line having crossed below the signal line. This crossover typically indicates a bearish market outlook. The breakdown from the bullish flag pattern suggests that the previous uptrend may have lost steam, and further downside could be possible if the current support level doesn't hold.