The Mt. Gox bankruptcy saga seems to end as the long-awaited repayment process finally begins. On July 5, Mt. Gox, some creditors started receiving Bitcoin (BTC) and Bitcoin Cash (BCH) in their accounts. Some crypto investors worry about the impact it will have on the market.

Repayments Flow Through, Japanese Creditors First In Line

Mt. Gox was the largest Bitcoin exchange in the world ten years ago, handling around 70% of all BTC transactions. In 2014, the exchange suffered an alleged security breach that resulted in the loss of 850,000 BTC and the eventual bankruptcy of the trading platform.

A decade later, the affected Mt. Gox users have begun receiving the long-awaited repayments. Mark Karpelès, the former CEO of Mt. Gox, stated in an X post his excitement that the payout process finally started:

MtGox customers have finally started receiving Bitcoins! After over 10 years I wasn’t sure anymore if it’d finally happen, but here we are finally!! This has been a long journey and I’m happy to see we’re finally getting there, only a bit more…

The Rehabilitation Trustee, Nobuaki Kobayashi, released a notice on July 5 revealing it had made repayments in BTC and BCH to some of the creditors. The payout was made through a part of the Designated Cryptocurrency Exchanges following the Rehabilitation Plan.

Some users have reported that they have already been credited. As seen in the subreddit dedicated to the exchange’s insolvency, Japanese creditors have received their Bitcoin and Bitcoin Cash in full. One Reddit user reported being credited “exactly the amount displayed in the Mt Gox table” to their BitBank account.

Seemingly, only users from the Japanese crypto exchange have received their tokens so far, which sparked fear in some crypto investors. The notice stated that some creditors might have to “wait for a while” to receive their BTC and BCH payout, which could take up to 90 days.

Investors Fear A Bitcoin Carnage

Crypto investors remain wary of the market as Bitcoin’s price has taken a hit following the repayment news. Several community members fear that a massive sell-off from the creditors will follow despite the assurance that many will hold their Bitcoin.

Nonetheless, some creditors have expressed their desire to make some profits from their tokens. “At this stage, as soon as I get them, I’m flogging them on Kraken,” one user said, suggesting that most affected users might feel they have recovered from their loss, so “It’s all bonus.”

As a result, some believe that the payout should be disbursed in several installments to prevent a further market decline. Renowned Journalist Tim Copeland weighed in on the situation, expressing concern about the advantage the early receivers might have on other creditors.

Seemingly, users from exchanges like Kraken have a disadvantage against Japanese creditors as they don’t have access to their Bitcoin and Bitcoin Cash tokens yet. This allows Japanese users to sell their BTC before any other creditor, which could affect late receivers if the price continues bleeding.

Ultimately, a sector of the crypto community appears to be bearish after BTC fell to $54,000 earlier today. As of this writing, BTC is trading at $55,520, a 2.5% drop in the last 24 hours.

As Bitcoin faces strong headwinds, breaching two critical support levels at $60,000 and $56,500 in quick succession, it may, on the surface, appear that fear is gripping the market. There are reasons to be afraid, especially for coin holders leveraging BTC in decentralized finance (DeFi) protocols, looking to take out loans using the asset as their collateral.

Fear Is Yet To Grip The Bitcoin Market

Even as prices plunge, one on-chain analyst, taking to X, argues that the market is relatively composed and fear and panic haven’t fully gripped it yet. Pointing to the Bitcoin Daily Realized Profit Loss ratio, the analyst said that unless there is an uptick in the number of addresses in red, pointing to panic selling, the market can withstand more losses.

Per the analyst’s assessment, the absence of “panic selling” bars suggests that investors are still processing the current events. Even as prices crater below $56,500, the market, the analyst added, can fall to as low as $47,000, a level that “doesn’t look as terrible as it did three weeks ago when we were at 70,000.”

Nonetheless, amid this necessary correction, the analyst added that the shakeout should be slower. In this way, there will be a more orderly market correction.

As of July 5, Bitcoin fell nearly 30% from all-time highs and is under immense selling pressure. Following the drop below $56,500 earlier today, it is evident that the coin is now within a bear breakout formation. The sell-off forced prices from the March to May 2024 range. This signals a new phase after expansions in Q1 2024 when the coin roared to $73,800.

Analysts expect more losses with sellers in the driving seat and Bitcoin within a bear breakout formation. Thus far, the immediate support is at $50,000 and $45,000, marking January 2024 highs.

Best Time To Buy Bitcoin? Wait For This Signal

While the drop is forcing investors to seek refuge in stablecoins, another analyst thinks this could be the best time to scoop more BTC at a discount. Taking to X, the analyst pointed out several fundamental factors that paint a long-term bullish picture.

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Some of these tailwinds include the availability of spot Bitcoin exchange-traded funds (ETFs). There’s also regulatory clarity in the United States ahead of the highly contested presidential election. At the same time, the analyst is convinced the upcoming $16 billion payout by FTX trustees would be a net positive for optimistic BTC bulls.

Even so, before there is stability and this week’s sell-off countered, there must be an uptick in new addresses. Once this is observed, it would mean that new investors are pouring in, creating demand for the coin. For now, prices are plunging, and fewer addresses are being created.