Bitcoin on MtGox Dives Below $140 Ahead of Update

Bitcoin (BTC) on MtGox has taken a dive over the past 4 hours, once again losing as much as half

Bitcoin (BTC) on MtGox has taken a dive over the past 4 hours, once again losing as much as half its value. It is currently trading at $135.

Trading had been “relatively” flat since Tuesday, hovering in the $240-300 range for much of the period. This came after BTC temporarily jumped to over $400 upon indications from MtGox that they will be resuming withdrawals, only to drift back to and beyond earlier lows as the market grew increasingly skeptical of MtGox’s ability to make good on its promises. In addition, the prospects of a long-term solution restoring a complete and secure transfer capability remain murky.

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The cause for the sudden drop is unclear at this point: there may be market participants expecting the worst and triggering a snowball effect, or perhaps some who are already confident of what the outcome will be.

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Elsewhere, BTC on BTC-e and Bitstamp has remained somewhat resilient. On both exchanges, BTC has mimicked its negative trajectory from MtGox but on fraction of the scale, losing no more than 7% on either exchange before recovering some of its losses.

BTC is trading at $590 on BTC-e and $612 on Bitstamp.

Traders are likely hedging their bets while watching the calamities befalling MtGox over the past few hours, but remain largely confident that the issues experienced are more specific to MtGox than to Bitcoin itself, especially following the overwhelming response confirming such from prominent members of the Bitcoin community.

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