First Mover Americas: Mt. Gox Repayments Worsen BTC Woes

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Bearish sentiment became more pronounced in the crypto market early Monday after defunct crypto exchange Mt. Gox, which is supposed to return over 140,000 BTC to victims of a 2014 hack, said it will begin repayments next month. Bitcoin slipped to $60,723, registering an over 5% loss on a 24-hour basis at one point. Ether and the broader market followed suit, with the CoinDesk 20 Index (CD20) also falling more than 5%. Broadly speaking, bitcoin's recent retreat from above $70,000 has taken the shape of a double top bearish reversal pattern. However, spot and futures volumes in bitcoin and ether markets on centralized exchanges have been considerably softer than record highs in March, according to FalconX. That's a sign of decreased investor participation or conviction in selling action, often a characteristic of a "bear trap."

Ether traders have been snapping up bullish options on Deribit in a falling market. According to Amberdata, they have been buying ether's September expiry $4,000 call option in large numbers in anticipation of a move to new record highs. "Looking at the block flows this week, we see a ton of buying activity for the September $4,000 calls," Greg Magadini, director of derivatives at Amberdata, said, adding it is a sign of traders betting that "if ETH gets above $4k we likely test and breakout new all-time-highs."

Japanese institutional investors are warming up to digital assets, according to Nomura's survey of 547 Japanese investment managers. The April survey showed that over 50% of the managers planned to invest in crypto in the next three years, viewing it as a diversification opportunity. Managers could allocate between 2% and 5% of assets under management to crypto, the survey revealed, adding nearly 80% would invest over a year. The pivot to crypto follows mounting concerns about Japan's debt load and the yen's exchange-rate volatility. Tokyo-listed Metaplanet recently adopted BTC as a reserve asset to hedge against Japan's fiscal problems. On Monday, the firm said it would buy another $6.2 million worth of BTC using proceeds from the debt sale.

Chart of the Day

  • The chart shows CryptoQuant's Coinbase premium index, which tracks the spread between bitcoin’s prices on the Nasdaq-listed Coinbase (COIN) exchange and the offshore giant Binance.
  • The cryptocurrency continues to trade at a discount on Coinbase, reflecting weaker net buying pressure from U.S. investors.
  • Source: CryptoQuant

- Omkar Godbole

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