Bitcoin fell below $55,000 on Friday, marking its lowest level since late February. The cryptocurrency has lost about 13% so far this week, with analysts attributing the decline to further liquidations by leveraged investors. The selloff has been exacerbated by fears surrounding the bankrupt Japanese exchange firm Mt. Gox. The firm's repayments of more than $9 billion worth of Bitcoin to approximately 127,000 creditors are likely to trigger widespread profit-taking.

Analysts suggest that markets are trying to anticipate the impact of these creditor flows, leading to sharp price declines. The expectation of substantial selling pressure from creditors liquidating their Bitcoin holdings has created a sense of urgency among investors to offload their positions, further driving down the price.

Adding to the downward pressure, billionaire Bitcoin investor Peter Thiel recently revealed that he sold much of his holdings due to expectations of heightened volatility. Thiel's move has likely influenced other large investors to reassess their positions, contributing to the broader market selloff.

Meanwhile, the second-largest cryptocurrency by market capitalization, Ethereum, has also experienced significant losses. Ethereum has plunged about 16% so far this week. This decline comes despite expectations that US regulators would approve the first Ethereum spot exchange-traded funds (ETFs) later this month. The anticipation of regulatory approval had initially buoyed sentiment around Ethereum, but the broader market selloff has overshadowed these positive developments.

The cryptocurrency market's recent turbulence highlights the volatility and sensitivity to major events and announcements. The potential for large-scale liquidations, as seen with the Mt. Gox repayments, can trigger significant market reactions, leading to sharp price movements.

In summary, Bitcoin's drop below $55,000 is a result of a combination of factors, including leveraged investor liquidations, fears of Mt. Gox's Bitcoin repayments, and high-profile sales by prominent investors like Peter Thiel. The accompanying decline in Ethereum further underscores the market's current volatility, despite positive regulatory expectations. As the market navigates these challenges, investors will continue to monitor these developments closely to gauge their potential impact on cryptocurrency prices.

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