Mt Gox Dump Strikes BTC Plummets 10 in 24 Hours Dips Below 54000 Wheres the Bottom

Original | Odaily Planet Daily
Author | Fu Ruhao


At noon today, Bitcoin briefly fell below 54,000 USDT, hitting a low of 53,269 USDT, marking a new low since February 26th this year. The maximum 24-hour decline exceeded 10%, currently rebounding to 54,600 USDT at the time of writing. Altcoins fared even worse, with an average drop of around 10%. Real-time quotes from Eu Yi OKX are as follows:
ETH dropped to a low of 2,806 USDT at one point, currently trading at 2,881.61 USDT, with a 24-hour decline of 8.01%;
SOL dropped to a low of 120.65 USDT, currently trading at 126.74 USDT, with a 24-hour decline of 6.38%;
PEPE dropped to a low of 0.000008221 USDT, currently trading at 0.000008326 USDT, with a 24-hour decline of 12.58%;
OP dropped to a low of 1.22 USDT, currently trading at 1.3232 USDT, with a 24-hour decline of 13.36%;
STRK dropped to a low of 0.4488 USDT, currently trading at 0.4951 USDT, with a 24-hour decline of 15.76%.
According to CoinGecko data, influenced by the overall market downturn, the total market capitalization of cryptocurrencies has shrunk to 2.08 trillion US dollars, with a 9% decline in the last 24 hours.
In derivatives trading, Coinglass data shows that within the past 24 hours, the total amount liquidated across exchanges has reached as high as 678 million US dollars, with the majority being long positions totaling 588 million US dollars. Specifically, BTC liquidations amounted to 226 million US dollars and ETH liquidations amounted to 166 million US dollars.


Mt. Gox Repayments, U.S. and Germany Selling Off, ETF Outflows
The current downturn in the market is mainly due to Mt. Gox repayments and selling off by the U.S. and German governments of BTC holdings.
After multiple small transfer tests involving several Mt. Gox wallets yesterday, this morning Mt. Gox (starting with address 1HeHLv) transferred over 47,228.7 BTC to a new address (starting with 1L7Xbx), worth approximately 2.71 billion US dollars. Subsequently, this address transferred over 47,200 BTC to 2 addresses, including:
– 44,500 BTC (worth 2.55 billion US dollars) to address 16ArP3…VqdF;
– 2,700 BTC (worth 154.8 million US dollars) to an internal address 1JbezD…APs6.
According to blockchain analyst @ai_9684_xtpa, Mt. Gox transferred 1,544 BTC to a new address 1PKGG…szwzV two hours ago (worth 84.87 million US dollars), suspected to be owned by the exchange Bitbank. This action signifies Mt. Gox’s selling off, which triggered a drop in Bitcoin prices to 53,269 USDT. Multiple token transfers by Mt. Gox in the past two days have exacerbated market panic about its sell-off, becoming a primary factor in today’s market downturn.
In addition, blockchain data shows that in recent days, the German government has transferred over 195 million US dollars worth of Bitcoin to various cryptocurrency exchanges including Coinbase, Kraken, and Bitstamp, intensifying market volatility. Furthermore, according to Arkham monitoring, the U.S. government wallet address (starting with 349c6) transferred 237 BTC yesterday afternoon to address bc1qvc, worth about 13.67 million US dollars. Changes in holdings by the U.S. and German governments have similarly heightened market concerns about future market conditions.
In addition to government sales, there have been net outflows from Bitcoin ETFs in recent trading days. Nine Bitcoin ETFs collectively reduced their holdings by 609 BTC, worth approximately 35 million US dollars. According to CryptoQuant data, during this downturn, approximately 2.4 billion US dollars worth of Bitcoin with holdings of 3-6 months have been transferred. Analyst Cauê Oliveira suggests that this represents selling pressure from entities that bought earlier in the year, possibly speculating on Bitcoin ETFs and halving expectations.
With multiple factors at play, the cryptocurrency market has further declined.
Future Outlook: Trump’s Presidency May Change the Downtrend
The main reason for the current downturn is Mt. Gox’s sell-off, although the market may have exaggerated its impact.
Vijay Ayyar, Managing Director of Gemini Asia-Pacific Consumer Growth, suggests that given the diverse nature of recipients, Mt. Gox’s overall impact from repaying cryptocurrencies could be “dispersed.” On the one hand, some individual holders will immediately receive Bitcoin, while a “significant amount” will be paid to the claims fund. The fund will subsequently distribute cryptocurrencies to their limited partners, which could take time and factor in the price impact.
Alex Thorn, Head of Research at Galaxy, shares a similar view, believing that the actual amount of Bitcoin received from Mt. Gox compensation will be less than expected, reducing selling pressure compared to market expectations. Furthermore, most creditors he has spoken to indicate they will receive payments in cryptocurrency rather than fiat currency and intend to hold these assets primarily, suggesting they will not engage in mass selling.
Additionally, analysts at J.P. Morgan suggest that while Mt. Gox repayments may initially pressure the cryptocurrency market, recovery could occur from August onwards, especially with FTX repayments expected. Founder and CEO Evgeny Gaevoy of Wintermute commented, “Stay steady; the current market is just a seasonal phenomenon of summer. The market will recover in August or September, before the U.S. elections.”
Another factor contributing to the downturn is the German government’s selling off. Sun Yuchen, founder of TRON, commented on X platform that he is willing to negotiate with the German government to purchase all of its BTC off-market to minimize market impact. Meanwhile, German MP Joana Cotar strongly criticized the government’s large-scale sale of Bitcoin, suggesting Germany should reconsider this strategy and compare notes with the U.S. on treating Bitcoin as a strategic reserve currency.
As for ETF fund outflows, compared to previous weeks of continuous net outflows, yesterday’s outflows were more of a market adjustment.
Ki Young Ju, founder and CEO of CryptoQuant, noted that this cycle is different due to the source of funds and that spot Bitcoin ETFs currently account for a quarter of total spot trading volume. This indicates that new entrants’ funds are more mature than ever before, with confidence that more mature funds will enter the field. Mature funds typically have diamond hands, and many institutional capitals are still waiting to enter the channel now open to them.
The primary factors influencing future market trends are the results of the U.S. election and expectations of Fed rate cuts.
Market analysis suggests that if Trump is re-elected, the end of the Russia-Ukraine war could bring about a global market surge, potentially leading to a rally in cryptocurrency markets. Furthermore, as a cryptocurrency-friendly figure, Trump’s presidency may further increase mainstream acceptance of the cryptocurrency industry, thereby boosting bullish expectations.
In addition, expectations of Fed rate cuts have been a major bullish factor anticipated in the market this year. Fed Chairman Powell has expressed views on rate cuts in 2024 on various occasions. In an April speech, he mentioned a cautious approach to rate cuts, suggesting starting cuts later in the year “may be appropriate.” Moreover, he may provide a clearer hint about the timing of rate cuts at the June FOMC meeting.
Overall, the current market downturn is evident. Aside from Fed announcements of rate cuts, bullish prospects can only be expected from developments in the U.S. election; currently, Trump’s chances remain high, with expectations of a rally in November.