May’s Low at $57,000 Holds as Support for Bitcoin

Bitcoin Chart Daily – Threat to the 200-Day Moving Average

The 200-day moving average (purple line) which held in May at $57,000, but that SMA is now broke. However the support at $58,000 held in the first attempt. A decisive break below this level would be the first since October of last year, signaling a shift toward bearish momentum for Bitcoin. Although buyers still have some hope, with the May 1 low around $56,500 providing a potential support level, the breach of the 200-day moving average is likely to embolden sellers, leading to a more aggressive downward move. As a result, this critical support may not hold for long.

Potential for a Significant Drop

If the technical indicators hold, Bitcoin could quickly fall below $50,000 next. The main narrative driving the recent selling pressure is the distribution of 141,000 bitcoins from the Mt. Gox bankruptcy. It’s astonishing to recall that this event occurred a decade ago when Bitcoin was trading at roughly $600.

A Remarkable Investment Journey

Holding assets in a hacked exchange like Mt. Gox, which once held up to 950,000 bitcoins, could turn out to be one of the most successful investments ever. At today’s price of around $57,350, the return on these holdings is nearly 10,000%.

Market Speculation on Liquidation

The key question now is: What will the former Mt. Gox users do with their bitcoins? The market seems to be betting on some degree of liquidation. The distributed bitcoins represent 0.7% of the total outstanding bitcoins, so while the impact might seem manageable, narratives often overshadow price action in the Bitcoin market.

Timing and Opportunities

Payouts from the Mt. Gox bankruptcy are set to begin in early July, which could create buying opportunities before the month’s end.

Key Technical Levels

From a technical perspective, the level to monitor is the $56,483 low from May 1. A break below this point would bring Bitcoin to its lowest level since early March, potentially triggering significant selling pressure. Keeping an eye on this level is crucial for anticipating market movements.

Bitcoin Live Chart