Bitcoin fell 6% to $54,600 on weekend trading despite clawing back losses from the end of last week.
The world's largest crypto by market capitalization fell to a low of $54,000 on Friday, Decrypt data shows. The asset is currently trading at $55,300.
Several headwinds for Bitcoin persist, including crypto market uncertainty, potential selling pressure from the German government, and 127,000 creditors awaiting crypto funds from the Mt. Gox bankruptcy estate.
A brief price rally attempted to regain a footing above $58,000 by Sunday before conceding gains to trade at its lowest point since late February.
Germany holds 39,826 BTC worth an estimated $2.2 billion at current prices, according to an Arkham Intelligence dashboard.
Users from defunct Japanese exchange Mt. Gox, meanwhile, are waiting to receive up to $7.7 billion in funds they lost due to a hack more than 10 years ago.
End of Germany, Mt. Gox Sales 'Likely' to Mark Bitcoin Bottom, Experts Say
The crypto market is staring down its toughest headwind in months as the potential Bitcoin (BTC) sales from Mt. Gox and the German government begin to weigh heavily on investors' minds. Observers are wondering where prices could be headed next, with some forecasting an ease in market conditions only when selling pressure from Mt. Gox and Germany abates. Bitcoin shed 7% of its value late Thursday, sending prices to their lowest point in four months to $53,550, and sparking a flurry of liquidation...
Repayments from Mt. Gox are set to begin this month following preparations for distributing funds. The defunct exchange plans to disburse around 142,000 BTC and 143,000 Bitcoin Cash.
"While it is not yet clear what portion of the total distribution will be sold at market, there will be significant selling pressure added to Bitcoin," K33 Research said of Mt. Gox creditors in its latest report.
Summer typically brings a lull in crypto markets, but with an excess supply and downward momentum, traders could face a busier period than expected if more supply floods the thinly traded order books, K33 added.
Liquidations across the crypto market show long positions have been wiped to the tune of $175 million, according to CoinGlass data. A further $35 million in short positions has also been erased, amounting to some $210 million.
It follows Thursday and Friday's extensive sell-off, which saw $600 million in liquidations after Bitcoin briefly dropped below $55,000.
Broader markets are experiencing the impact of a liquidity shortfall in Q2 2024, Web3-focused venture capital firm Ryze Labs told Decrypt.
The Federal Reserve's reverse repo balance surged by over $200 billion last week to $664.5 billion, hinting at a significant liquidity drain, it said.
The reduction in China's liquidity injections since February 2024 could also tighten global liquidity, potentially affecting crypto prices and increasing volatility, Ryze Labs said.
