Mt. Gox, the defunct Bitcoin (BTC) exchange that suffered a major collapse in 2014, recently began distributing payments to awaiting creditors..
The release of a significant amount of BTC, equivalent to $9.4 billion, on May 27 raised concerns about potential market liquidity and price stability. In response, on-chain market intelligence platform CryptoQuant provided an analysis of the potential impacts of this development.
Potential effects on the market
According to the firm analysis138,000 Bitcoins were significantly moved from Mt. Gox in seven transactions, each worth between 4,000 and 32,000 Bitcoins.
Initially, these funds were transferred to a single address and distributed to three separate addresses, each holding 47,400 Bitcoins.
It is important to note that these addresses remain under the control of Mt. Gox's Rehabilitation administrator, and no repayment to creditors has yet been made. The consolidation of these funds suggests that the trustee is actively preparing for future repayments from the rehabilitation plan.
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At this time, transfers within trustee-controlled addresses have not had an immediate impact on the market. However, the company notes that a possible repayment to creditors, expected to be completed by October 31, 2024, could influence the value of Bitcoin. market dynamics.
For CryptoQuant, the market impact will depend on various factors, including timing, size, and method of redemption. If and when the fiduciary begins repaying creditors, it could introduce a substantial amount of Bitcoin into the market, influencing liquidity and price stability. The firm concluded by stating:
These moves do not cause any immediate selling pressure for Bitcoin, as the transfers took place to addresses of the same entity (Mt. Gox Rehabilitation Trustee) and are not yet available on the open market.
Bitcoin price gravitates towards “level 3” at $91,000
As Concerns Grow About Potential Downside Impact on Bitcoin Price Due to Mt. Gox Repayment Plan, Crypto Con Analyst Offers knowledge in the current state of Bitcoin price ranges.
Bitcoin price ranges refer to specific price ranges that analysts monitor closely to assess potential market movements. These bands act like magnets, pulling the price towards specific levels.
In particular, as the chart above shows, “Level 3” at $91,539 has become an important price target. Despite the pursuit consolidation at level 2.5, the analyst believes that the market shows signs of gravitation towards level 3.
Additionally, Crypto Con notes that historical data suggests that the upper band of the cycle, priced at $123,000, will likely be accurately reached during the final “Bitcoin parabola.”
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At the time of writing this article, the largest cryptocurrency The market was trading at $67,400, slowly losing ground after failed attempts to consolidate above the $70,000 level, which is seen as the final hurdle before a potential retest of its current all-time high of 73 $700 reached on March 14.
Featured image from Shutterstock, chart from TradingView.com