Bitcoin (BTC) faced a significant downturn as it dipped below the $61,000 mark, resulting in the liquidation of over $122 million in leveraged long positions. This drop, which raises concerns about Bitcoin potentially breaching the critical $60,000 threshold, reflects the volatility and underlying pressures in the cryptocurrency market.

According to CoinGlass data, more than $122 million worth of leveraged long Bitcoin positions were liquidated in the 24 hours leading up to 1:25 pm UTC. This liquidation event was triggered by an intraday price drop exceeding 5%, with Bitcoin momentarily falling below $61,000 at 1:25 pm UTC on June 24. Over the past week, Bitcoin has seen a decline of over 7%, as reported by CoinMarketCap.

Leveraged positions highlight crucial price levels for underlying assets. CoinGlass indicates that a further drop below the $60,500 mark could lead to the liquidation of over $180 million in leveraged long positions across all exchanges. This potential for additional liquidations underscores the fragility of the current market.

Impact of Mt. Gox Repayments and Additional Selling Pressure

The price drop coincides with the announcement from the defunct crypto exchange Mt. Gox, which plans to begin processing repayments to its users. More than $9.4 billion worth of Bitcoin is owed to approximately 127,000 Mt. Gox creditors, who have been waiting over a decade to access their funds. This massive repayment could introduce significant selling pressure in the market.

Eric Balchunas, a senior exchange-traded fund (ETF) analyst at Bloomberg, highlighted the potential impact of these repayments. He noted that the repayments are comparable to negating more than half of all ETF inflows in a single instance, indicating a substantial market disruption.

Adding to the market's challenges, a German government-labeled wallet moved nearly 6,500 BTC on June 19, as reported by Arkham Intelligence. This wallet has held nearly 50,000 BTC since February 2024, worth over $3 billion at Bitcoin’s current price above $61,000. The movement of such a large amount of BTC could further contribute to market volatility.

Bitcoin's Oversold Condition: A Comparative Perspective

Following the recent price drop, Bitcoin has entered oversold territory based on its relative strength index (RSI). The RSI, a popular momentum indicator, measures whether an asset is oversold or overbought based on recent price changes. On the daily chart, Bitcoin’s RSI has reached 28, signaling an oversold condition.

The last time Bitcoin's RSI fell below 30 was in August 2023, when it was trading at $26,000. This oversold condition suggests that Bitcoin might be due for a corrective rebound, although the market's reaction to ongoing and upcoming selling pressures will be crucial in determining its short-term trajectory.

As Bitcoin navigates these turbulent waters, market participants will closely watch for further developments, particularly concerning the Mt. Gox repayments and other significant market movements that could influence Bitcoin's price stability.