🌎 Bitcoin Hits 5-Month Low Amid Whale Selloffs and Mt. Gox Repayments

Today’s weekly recap covers significant developments in the cryptocurrency market: Bitcoin (BTC) hits a five-month low amid a series of whale selloffs, Mt. Gox begins creditor repayments, and Circle secures the first stablecoin license under MiCA as regulatory efforts increase.

Market Downtrend

After a bearish June, reports on July 1 suggested Bitcoin might recover in July based on historical performance. However, Bitcoin’s momentum halted after reaching a one-week high of $63,861 on the same day. Analysts observed that BTC diverged from the bullish U.S. equities, falling below $63,000 and failing to reclaim that level.

Glassnode indicated that Bitcoin was in an indecisive phase amid bearish pressure. BTC saw three consecutive intraday declines, dropping below $59,000 on July 4 as miner capitulation signs emerged.

Bitcoin Hits 5-Month Low

Despite the downtrend, Core Scientific founder Darin Feinstein remained bullish, suggesting that BTC was undervalued. Bitcoin continued to record lower lows, dropping below $57,000 on July 4, triggering selloffs among new holders.

A combination of miner capitulation, whale exchange deposits, selloffs from the German government, and Mt. Gox repayments exerted more bearish pressure on BTC, leading to a five-month low of $53,485 on July 5.

The Bitcoin slump impacted the broader market, causing losses for altcoins. Additionally, Bitcoin mining stocks experienced notable declines.

Meme Coins Rally

Following the downturn, Bitcoin attempted to recover, reclaiming $58,000 on July 6. However, while Bitcoin’s strength soon faded, meme coins saw stronger recoveries.

Market data showed that BONK, dogwifhat (WIF), PEPE, and BRETT all recorded gains of more than 15% over 24 hours on July 6. Meanwhile, BTC receded back below $58,000.

Last week also saw relatively low crypto funding activity, primarily due to the July Fourth holiday in the U.S. However, Sentient, an artificial intelligence (AI) research organization, raised $85 million in seed funding. Several other startups also secured venture capital.

German Government’s Distribution Campaign

The market crash resulted from multiple factors related to selling pressure. Data revealed that the German government continued to distribute part of the 50,000 BTC seized from the defunct piracy platform Movie2k.

Since June 19, the German Government, the U.S. Government, and Mt. Gox have transferred a total of 17,788 BTC ($1.08 billion). The German Government has been transferring BTC daily since July 1, sending out 7,070 BTC tokens last week, adding to market pressure. The German government now holds 39,826 BTC.

On July 4, Tron founder Justin Sun expressed his willingness to purchase the German government’s BTC off the market to reduce the selling impact. Additionally, German legislator and Bitcoin advocate Joana Cotar urged the government to stop the BTC sales.

Meanwhile, the U.S. government, which holds a larger amount of Bitcoin, distributed some of its holdings last week, amounting to 274 Bitcoins.

Mt. Gox Begins Repayments

The Mt. Gox repayments also contributed to the selling pressure. Mt. Gox, which recently announced plans to begin repayments this month, conducted a series of test transactions on July 4, confirming intentions to move their assets.

On July 5, the collapsed exchange transferred 47,228 BTC to a new address in preparation for the repayment. Creditors confirmed that the repayments began on July 4, with reimbursements in BTC and Bitcoin Cash (BCH).

Circle Secures Stablecoin License Under MiCA

With MiCA’s stablecoin legislation in full swing, Circle obtained a license to provide stablecoin services around USDC under the new law across the European Union, making it the first stablecoin issuer to secure this licensing.

The central bank of Russia might consider the legalization of stablecoins to leverage them for trade with China.

Other Regulatory Developments

The European Banking Authority (EBA) expanded its guidelines around Travel Rules to cover firms providing services on crypto. This move, effective from Dec. 30, aims to bolster anti-money laundering (AML) procedures.

In the U.S., a judge approved a motion from Ethereum development firm Consensys to expedite the timeline of its legal case against the SEC.

Mike Novogratz, founder and CEO of Galaxy Digital, stated that the U.S. crypto industry would secure the much-needed regulatory clarity regardless of who wins the forthcoming presidential election.