Bitcoin Prices Fall Below $60,000 Today, Reaching a Multiweek Low

Multiple factors, including profit taking and miner selling, weighed on the digital currency.

Bitcoin prices dropped below a key psychological level on Monday as multiple factors, including profit taking and miner selling, weighed on the digital currency.

Bitcoin prices fell below the $60,000 level on Monday as several factors, including traders cashing out at a profit and miners selling their cryptocurrency to bolster their bottom line, put pressure on the world’s most valuable cryptocurrency.

Bitcoin dropped to nearly $58,400 around 4:30 p.m. EST, according to Coinbase data provided by TradingView. At this point, the digital asset was trading at its lowest value since early May.

When asked to explain this latest decline, analysts cited a range of factors, including traders exiting their positions at a profit and miners selling their cryptocurrency to bolster their bottom line. Some also pointed to the recent announcement that closed exchange Mt. Gox will soon start repaying assets that were lost years ago when the marketplace was hacked.

“It’s likely coming from long-term investors taking some profits and from unprofitable miners post-halving selling their treasury holdings,” Sam Callahan, senior analyst at bitcoin financial services firm Swan Bitcoin, said via email.

Mt. Gox Announcement

Another variable that market observers mentioned was the recent announcement that closed exchange Mt. Gox will soon start repaying assets that were lost years ago when the marketplace was hacked.

Many consider this development a headwind for bitcoin prices, according to market participants cited in a CoinDesk article.

“The repayments are largely considered to add selling pressure to bitcoin (BTC) markets as early investors will receive assets at a much higher value than their entries before 2013, making them inclined to sell at least a part of holding, traders said,” the article stated.

While the news that Mt. Gox will start paying back cryptocurrency generated widespread news coverage, analysts polled for this article offered mixed replies regarding its actual impact on bitcoin prices.

Some cited it as a factor driving the cryptocurrency lower. Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, was in this camp.

“We do believe the news about Mt. Gox beginning to return BTC to victims is part of the downward pressure on Bitcoin’s price,” he stated through email, adding that “We are also watching sentiment analysis closely, as crypto profit-taking has become a common phenomenon.”

Tim Enneking, managing partner of Psalion, also weighed in.

“The Mt. Gox news on top of an already soft market was clearly the cause for today’s drop,” he said via email.

“Once the drop started, profit taking kicked in, long positions were liquidated voluntarily or involuntarily (in the case of leverage) and the losses accelerated,” he stated.

However, others took a more skeptical stance on the subject.

“The impact on Bitcoin’s price from Mt. Gox distributing Bitcoin is likely overblown,” said Callahan.

Brett Munster, portfolio manager for Blockforce Capital, also voiced his doubts through comments submitted via email.

“I think the fears surrounding the Mt Gox announcement are widely overstated,” he stated.

“Yes it’s true based on recent reports that Mt Gox will start distributing bitcoin in July,” Munster noted.

“The false assumption that many are making is that all those bitcoin are being distributed back to the retail customers that originally bought them. Because the coins are at a higher value, many of those retail investors will sell once they receive their bitcoin (or so the theory goes),” he said.

However, “anyone who has followed the Mt. Gox story closely knows this isn’t the case,” stated Munster.

“The reality is that there has been a very active secondary market for Mt. Gox claims over the last several years,” he noted, adding that “There are a few big institutional players that have accumulated a significant portion of those claims.”

“Thus, there are far less bitcoin going back to retail investors than most people realize and far more going to sophisticated, long term investors who aren’t likely to just dump the bitcoin when they receive it,” a development that will mute the impact these movements have on the cryptocurrency’s price.

Enneking also offered some additional nuance on the subject.

“The interesting thing about the Gox news is that anyone who was desperate to sell their Gox BTC did so long ago – to traders who were willing to play the long game and wait for the Gox rehabilitation trustee (bankruptcy administrator) to actually distribute,” he stated.

“Those who wanted to sell have, and current holders are almost certainly smart enough – and patient enough – to realize that selling immediately after distribution is the worst thing they could do.”

“Wait a couple of months, or a quarter at most, and they will be able to sell with at least a ‘7’ handle, versus today’s ‘5’” handle.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and