Bitcoins slump saw it dip to under $55,000 as it dropped below its 200-day simple moving average.
The downturn comes as Mt. Gox began to repay customers after a decade-long bankruptcy process that should see the return of about $9 billion in Bitcoin.
The fresh influx comes as market watchers expect the German government to sell its Bitcoin holdings, which will also weigh on markets.
So how bad will the downturn be?
This is what the experts say.
David Brickell, head of international distribution at FRNT, told DL News its difficult to say how far Bitcoin will fall.
Still, he sees signs the slump may turn around.
Macro factors line up positively, with the dollar drifting lower and yields reversing lower on expectations of Fed rate cuts and improved liquidity as major central banks adopt an easier policy stance, Brickell said.
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Several factors suggest a turnaround.
This latest flush might be sufficient to attract the dip buyers who have been sidelined, but remain longer term bullish and may well fire the starting gun on the next leg of the bull market, Brickell said. Bulls will be on the lookout.
Rachel Lin, co-founder and CEO of decentralised crypto derivatives exchange SynFutures, said the Bitcoin slump is due to market expectations that Mt. Gox users will dump their tokens,
But we might see a bounce-back if the selling is lower than anticipated, she told DL News.
Lin added that its possible Bitcoins price may tank even further: If there is enough selling to push the price lower, we might be looking at the $50,000 level soon.
Negativity about the impact of Mt. Goxs potential $9 billion dump on the market may just be sentiment.
Thats according to Brad Howell, managing director of crypto market maker Keyrock UK.
We should put this into perspective, Howell told DL News earlier this year.
Bitcoin averaged $30 billion in daily trading volume in March, and the market processed $72 billion in volume when Bitcoin dropped 8% on March 19, Howell said.
This should give you an idea of the volume required to move a market of this size, he said.
Howell also said he didnt expect Mt. Gox creditors to sell their assets as they are likely early adopters who are more likely to hold onto their Bitcoin.
Dont expect huge volumes to be dumped on day one, he said.
Adam Morgan McCarthy, an analyst at digital finance data company Kaiko, said that Bitcoin liquidity over the summer will play a big role in its price action.
Liquidity tends to dry up over the summer months. We can already see this happening, he told DL News.
This means theres less support when theres selling pressure and prices can move more sharply. I expect this to continue throughout July, August, and into September.
CCData research analyst Jacob Joseph told DL News theres reason to be bullish, despite the current challenges.
He cited growing crypto adoption among institutional players for instance via spot Bitcoin exchange-traded funds and the US election serving as positive catalysts for a rally.
In the US, both President Joe Biden and prospective Republican nominee Donald Trump have warmed to crypto.
Joseph said hell be watching for seasonal effects in the summer, which often result in lower institutional trading activity.
He will also keep an eye on key macroeconomic factors, including the inflation rate and the Federal Open Market Committee meeting later this month, for more hints.
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Will Bitcoin bounce back? Here's where five experts see the price heading next - DLNews