Bitcoin's slide under $58,000 could mark a bigger correction to come, analyst says
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- Bitcoin fell below $58,000 on Thursday, reaching its lowest level since May.
- The decline puts bitcoin below its 200-day moving average, which could signal a downturn, FXPro's Alex Kuptsikevich said.
- Investors are unloading the token as fear mounts of selling pressure from Mt. Gox.
Bitcoin hit a two-month low on Thursday, as the world's biggest cryptocurrency slid past $58,000 for the first time since May.
The apex token tumbled 3.5% through the day, at one point reaching as low as $56,882. The fallout extends a three-day drop, as worries mount over impending selling pressure in the market.
The decline has now pulled bitcoin below its 200-day moving average, FXPro senior market analyst Alex Kuptsikevich pointed out.
This metric is used to determine where a market is headed — consistent trades below the gauge typically suggest a downturn.
"From the current position, a 12% drop to $51.5k (February consolidation area) is more likely than the same amount of growth to $65.8k," he wrote on Thursday morning. The higher forecast is based on bitcoin's 50-day moving average.
Just three days into the month, bitcoin has already suffered an 8.6% decline. Driving the sell-off is looming concern over payouts from Mt. Gox, a crypto exchange that was declared bankrupt close to a decade ago.
The planned payments are to reimburse clients who were victims of a 2014 hack, and will be doled out in bitcoin or bitcoin cash. But that's adding to fears over selling pressure, as clients may choose to cash their tokens for big gains.
According to K33 research, the concern has been weighing on bitcoin's price in recent days.
Other crypto tokens, such as ether and solana, are following bitcoin lower. In fact, the industry market capitalization fell to a February low on Thursday, dropping below $2.17 trillion, Kuptsikevich wrote.
Bullish analysts have remained confident about a bitcoin comeback this year, however.
On Monday, Fundstrat's Tom Lee projected that the crypto will surge to $150,000 by the end of the year, once the Mt. Gox overhang passes.
Others, such as Galaxy CEO Michael Novogratz, warned months before that a bitcoin correction will happen before it can continue climbing higher. Speaking in February, he suggested a floor of $50,000.
Still, bitcoin is up over 38% year-to-date, after a massive bull run sent the token to a record $73,798. Sparking the upside was the launch of bitcoin spot ETFs in January.