Mt. Gox and US Liquidations to Inject $15B Bitcoin Selling Pressure

Analysts predict Bitcoin price crabwalk could emerge in September with Mt. Gox and the US government threatening to add approximately $15 billion of additional selling pressure.

The sluggish momentum witnessed by Bitcoin in its struggle to maintain above $60,000 could worsen into a plunge as defunct Japanese crypto exchange Mt.Gox and the US government liquidate their reserves. The two are set to fuel the selling pressure further as they liquidate BTC nearly $15 billion. 

Analysts anticipate over $14.8 billion of BTC would flood the market to impose downward pressure on the exchange level. Present data shows the US has 203,000 BTC in its reserves with an estimated $12.1 billion in value. The Mt.Gox trustee reiterated plans to distribute 46,000 BTC of $2.7 billion in estimated value. 

Crypto analytic firm Kaiko reveals Mt. Gox will distribute $2.7 billion using Kraken by Q4. The repayments will unlikely cause a huge market impact, per Thursday, August 29 report by Kaiko. 

Kaiko observed that Kraken has in the recently handled BTC ETF flows only experienced a minor increase in the price tumble. The liquidity profile illustrates that additional selling pressure will unlikely lead to structural issues affecting the broader market. 

The former Mt. Gox customers have witnessed a decade wait for the $9.4 billion repayment. The BTC attained over 8,500% appreciation in value a key ground for the majority of the investors to sell their crypto assets. 

Mt. Gox Creditors Hold $4B BTC Distribution

While Bitcoin value appreciated during the wait, the Mt. Gox creditors are yet to sell despite receiving nearly $4 billion from late July remittances.  

The July repayments accounted for 41.5% of the amount owed. Glassnode report acknowledged that the majority of the creditors opted not to dispose. The analyst noted that creditors embraced BTC settlement rather than fiat, despite the availability of the latter within the Japanese bankruptcy law. 

Glassnode indicates that creditors will sell only a small portion of the distributed coins. In particular, the spot cumulative volume delta (CVD) has yet to show a notable uptick on the crypto exchange Kraken since the Mt. Gox BTC distribution began. The CVD metric tracks the variance in purchase and sale trade volume as tracked on the centralized exchanges.

Bitcoin Price Tumbles Below $60,000

The Bitcoin price is struggling to regain momentum after the crypto asset breached the $60K psychological price tag following a 10.7% decline on the monthly chart. Analysts consider that for Bitcoin to visit the green zone requires a monthly close surpassing the $64.3K level. Bitfinex analysts warn that the absence of liquidity characteristics this summer will possibly plunge BTC into struggles to overcome the $63.9K resistance.  

Bitfinex analysts consider price a reflection of the historical transactions, creating the need to scrutinize under the hood. Notably, the price surge for the short-term holders saw BTC hover around $63,900. The gain saw some short-term holders take profit. 

Nonetheless, Bitfinex analysts point out that the BTC average returns remained -4.78% in September since 2013.

Bitcoin Exchange Reserves Tumble to Yearly Low

Crypto analysts spotlight the decline witnessed in BTC supply on the exchanges. Such signals likely prop to the bull market provided the demand grows. 

CryptoQuant analyst Gaah revealed on Thursday, August 29 that the BTC storage on the crypto exchange witnessed low supply.  Such constitutes a catalyst that could propel the BTC to retest levels above $60,000.

The CryptoQuant contributor observes that with the Bitcoin reserves hitting new lows in 2024 within the exchanges, such could illustrate reduced selling pressure. Such could potentially favor a bull market if the demand levels rise. 

The CryptoQuant data shows BTC reserves on the exchanges declining by approximately 12.9% since the onset of 2024. This leaves 2.62 million BTC across the leading crypto exchanges.

Gaah demonstrates that Bitcoin transfer to cold wallets typically illustrates that investors commit to holding the asset. Taking a long position shows optimism about Bitcoin’s potential rebound. 

The slump in the Bitcoin supply aligns with the CryptoQuant analyst’s suggestions that Bitcoin price will historically rally in Q4. The analyst observes that the rise in long-term holders would nurture the market resilience typically less prone to panic sales. 

The decline in BTC availability on exchanges in turn erodes the liquidity that would prompt immediate sale. Gaah echoes a comment by pseudonymous trader MartyParty who emphasized in a Tuesday, August 27 post on X that ultra-low BTC reserves suggest something bound to happen. 

The supply shock will emerge since the levels are not sustainable, per crypto commentator Bitcoin for Freedom update to his 74,800 X followers. He adds that the past week saw 56,000 Bitcoin transfers from the crypto exchanges since August 22.

The trader’s views affirm the revelation that BTC holders spent $10 billion to acquire the crypto asset. The holders appear to pull back from disposing of the Bitcoin since the price slid from $69,000.