Bitcoin printed a fourth consecutive weekly loss and slid to its five-month low. With selling pressures from the German government and the fear for Mt.Gox’s repayment have sent the price of bitcoin from $64k to $53.5k last week.
On Friday, Mt.Gox’s cold wallet moved about 47k BTC and the price dropped as much as about $3k in a matter of three hours. By the time Mt.Gox’s trustee officially announced that they had commenced repayment on the same day, bitcoin was already fluctuating around $54k. However, the price had bounced back after the announcement and briefly recovered $58k during the weekend. What is happening since Friday seems like the opposite of “buy the rumor, sell the fact”: the market had overly priced in the repayment before it actually started, and once it started and seeing the price stopped sliding, they started to buy back. Furthermore, bitcoin did not react positively to the cooling manufacturing and non-manufacturing PMI last week,
but it did to the jobs report on Friday, which was announced after the beginning of Mt.Gox’s repayment. This suggests that the market’s concern for Mt.Gox’s repayment is starting to wane and their focus is shifting back to the Fed’s policy decision.
Nevertheless, bitcoin is not completely out of the woods as it closed slightly below $56.5k on Sunday. Bitcoin rebounded from $56.5k back in May, and failing to maintain that level at its closing price seems quite bearish from a technical perspective. Still, this could be a bear trap considering the factors discussed above, but the price needs to recover quickly and close above $56.5k to prove that.