Bitcoin price failed to keep $20,000 as fears over a sell-off of defunct exchange Mt. Gox

Bitcoin price continued its bearish action on Friday night and slipped below the key $20,000 mark to $19,907, according to CoinMarketCap. It’s a monthly low for August and the first time Bitcoin went below $20k since July 14. Claims that 137,000 BTC are about to be offloaded on the open market are met with intense suspicion as Bitcoin price volatility returns. At the time of writing, BTC is changing hands at $20,044.


BTC/USD 4-hour chart | Source: TradingView

Mt. Gox rumors panic Bitcoin Twitter as Bitcoin price returns below $20,000

The market capitalization of Bitcoin has tumbled from $1.27 trillion in November 2021 to under $383 billion today. Bitcoin is now down 6.4% in the past week. Amid the bearish price action, over $250 million from 87,144 traders have been liquidated in the crypto market over the past 24 hours.

Thin weekend liquidity appeared to exacerbate already jittery markets, which reacted badly to unconfirmed rumors that Mt. Gox funds were due for release to creditors on Aug. 28. Claims varied widely at the time of writing, with some believing that a tranche of 137,000 BTC was set for release in one go. Others said that funds would be sent piecemeal, but that payouts would nonetheless begin this weekend.

A point of consensus came in the form of creditors allegedly wanting to sell BTC owed to them, this having been out of reach since 2014 when BTC/USD traded at under $500. The unrealized 40X returns, they feared, would prove too enticing for creditors to become willing hodlers.

Mt. Gox imploded with hundreds of thousands of bitcoins almost ten years ago. Following a lengthy legal procedure dealing with funds subsequently recovered from the exchange, the appointed rehabilitation trustee, Nobuaki Kobayashi, announced on July 6 that he was “preparing to make repayments” to creditors.

In documentation at the time, Kobayashi gave “the end of August” as a reference period during which some initial payments might begin.

“Following discussions with the Court and in accordance with the Rehabilitation Plan, the Rehabilitation Trustee plans to set the Assignment, etc. Restriction Reference Period from approximately the end of August this year until all or part of the repayments made as initial repayments is completed for safe and secure Repayments,” part of it read.

With no new official information appearing on the dedicated website covering the rehabilitation proceedings, however, it remained unclear as to why the sell-off rumors had gained so much traction so quickly.

For trader and analyst Josh Rager, meanwhile, even if the full hoard of BTC were sold at once, the resulting selling pressure would not create the kind of apocalyptic event some imagined.

The latest losses nonetheless triggered more pain for existing BTC hodlers. According to data from on-chain analytics firm Glassnode, the percentage of the overall BTC supply in profit hit a one-month low on the day at just above 55%.

Older coins continued a trend of increasing dormancy, meanwhile, with the percentage of the supply last leaving its wallet two years ago or longer hitting ten-month highs.

Read more:

Join us on Telegram

Follow us on Twitter

Follow us on Facebook

You might also like