‘Terrifying’ Crypto Crash Triggers ‘Extreme Fear’ Panic After $2 Trillion Bitcoin, Ethereum, XRP, And Solana Price Wipe Out

07/06 update below. This post was originally published on July 04

Bitcoin
Bitcoin
has crashed toward $50,000 per bitcoin, diving after Federal Reserve chair Jerome Powell warned of a “critical period.”

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The bitcoin price has lost around 25% over the last month, with the combined bitcoin, ethereum, XRP
XRP
, solana and crypto market coming within touching distance of a $2 trillion market capitalization for the first time since early February—down from nearly $3 trillion in March.

Now, after one legendary tech billionaire said he thinks bitcoin could replace the U.S. dollar, collapsed bitcoin exchange Mt. Gox has begun moving what could be a tidal wave of bitcoin.

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“On July 5,2024, the [Mt. Gox] rehabilitation trustee made repayments in bitcoin and bitcoin cash to some of the rehabilitation creditors through a part of the designated cryptocurrency exchanges etc. in accordance with the rehabilitation plan,” a letter addressed to “whom it may concern” read that was posted to the Mt. Gox website.

Shortly after being posted, the document was unavailable but it wasn’t immediately clear why.

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Earlier, bitcoin and crypto analysts with Arkham
Arkham
Intelligence said they had seen almost 50,000 bitcoin worth around $2.7 billion controlled by Mt. Gox moved to a different wallet in what could be a sign the crypto could soon be distributed to creditors.

“Should an additional 200,000 bitcoin—valued at more than $10 billion—hit markets in a short space of time, supply will likely outstrip demand, and we could see the price of bitcoin drop even further,” Neil Roarty, analyst at investment platform Stocklytics, said in emailed comments.

In late June, Mt. Gox trustees announced the exchange, which collapsed 10 years ago, would begin distributing almost $10 billion worth of funds in bitcoin, bitcoin cash and fiat currency to its creditors in early July.

07/06 update: The bitcoin price crash has found a floor, with the broader crypto market rebounding slightly after its steep sell-off this week.

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However, traders and analysts remain fearful the bitcoin price crash could send ethereum, XRP, solana and other major cryptocurrencies lower.

The widely-followed Crypto Fear & Greed Index, created by data site Alternative.me, has dropped to its lowest level since January 2023, just after the bitcoin price had crashed to just $17,000 in the aftermath of the FTX crypto exchange implosion, and is now teetering on the verge of “extreme fear.”

“The crypto market cap has fallen back below $2 trillion, accelerating its decline and losing over 8%, while many altcoins have suffered double-digit losses within the last 24 hours,” Alex Kuptsikevich, FxPro senior market analyst, said in emailed comments that called the bitcoin price crash “terrifying.”

Bitcoin’s “200-day moving average failed to act as support, and we saw an acceleration in the sell-off after a break below this line,” Kuptsikevich wrote, adding the ethereum price “situation looks like a pause before a new downward impulse that could take the price back to $2,300.”

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“The direction of bitcoin in the coming days will be determined by the selling pressure from Mt. Gox users,” Rachel Lin, the chief executive of decentralized exchange SynFutures, said in emailed comments.

“The market expects most Mt. Gox users dump their tokens, but we might see a bounce back if the selling is lower than anticipated. On the other hand, if there is enough selling to push the price lower, we might be looking at the $50,000 level soon.”

Lin warned the “crucial levels” for bitcoin and ethereum were $60,000 and $3,350, respectively—both of which have now been “decisively” broken.

“As expected, the fall in bitcoin has dragged down all the other assets,” Lin said. “Ethereum
Ethereum
is down nearly 9% over the week, and most memecoins are down 10% to 20%.