Is Mt. Gox A Worry For Bitcoin? Crypto Analyst Weighs In
May 28 2024 - 10:00PM
NEWSBTC
Bitcoin outflows from the Mt. Gox exchange have occurred in the
past day, making some worry about potential bearish effects. Here’s
what an analyst thinks. Mt. Gox Has Made Several Bitcoin
Transactions In The Last 24 Hours During the past day, several
movements from wallets associated with the bankrupt cryptocurrency
exchange Mt. Gox have been spotted on the Bitcoin blockchain. The
platform had announced plans to repay its creditors, so the
transactions are likely related to them. Mt. Gox has moved out
137,890 BTC in total, worth almost $9.4 billion at the current
cryptocurrency exchange rate. With these transfers, the market has
become concerned about whether these tokens will move towards
trading, adding to the selling pressure in the market. Related
Reading: Ethereum Deposits At 4-Month High: Whales Preparing For
Selloff? As a result, the BTC price has fallen about 4% in the past
24 hours. While the market has reacted negatively to the news so
far, some have wondered whether these withdrawals are actually
going to be bearish. Analyst James Van Straten discussed this in an
X post and provided perspective on how a potential selloff
arising out of these repayments would compare against another that
BTC witnessed recently. The distribution event in question is from
the long-term holders (LTHs), which make up one of the two main
divisions of the BTC market based on holding time. All investors
holding onto their coins since more than 155 days ago qualify for
this cohort, while those who bought within the past 155 days are
put in the short-term holder (STH) group. The LTHs are considered
to be the resolute side of the market, as they rarely participate
in selloffs, while the STHs are the fickle-minded investors who
regularly react to sector events by panic selling. The recent rally
in the asset, though, proved to be enough to move even these
HODLers into selling, as the chart below shows their total supply.
As the graph shows, the LTH supply has been moving sideways in the
last couple of months, but it was in a state of decline for five
months before that. In this selloff, the LTHs sold around 1 million
tokens, of which around 340,000 BTC was linked to GBTC outflows. At
the same time, this distribution from the LTHs occurred, though the
coin’s price marched to a new all-time high, implying that the
market could absorb this massive selling pressure just fine.
Straten notes that the Mt. Gox repayments are only about a tenth of
this selloff, and not everyone who will get these tokens will
decide to sell. At the very least, everyone wouldn’t sell at the
same time. Related Reading: Injective (INJ) Buy Signal That Led To
700% & 555% Rallies Forms Again Thus, given this fact, it’s
possible that Bitcoin may not be affected by this distribution if
demand for the cryptocurrency remains as strong as it has been
recently. BTC Price Bitcoin had risen above the $70,000 level
earlier, but the Mt. Gox news has brought the asset down to
$67,700. Featured image from Dall-E, Glassnode.com, chart from
TradingView.com
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