Dezi's Bitcoin has been sold out, next is Mentougou? Analyze the impact on the market

In May 2024, the BTC in the Mentougou cold wallet moved for the first time since 2018, causing panic in the market. On July 5, 2024, 47,000 tokens were moved from the Mentougou account address, of which 1,545 BTC were transferred to Bitbank and began to be paid. On the same day, the German government sold BTC, and the largest single-day decline exceeded 8%.
As of July 12, 138,000 BTC are still in the account address of Mentougou. It can be considered that the selling pressure of Mentougou has not actually entered the market. The decline on July 5 is part of the realization of the expected decline in the selling pressure of Mentougou.
Selling pressure analysisMentougou creditors will sell some of their BTC, but probably not all of them.
From the perspective of profitability, according to cost calculation, when Mentougou went bankrupt, the BTC price was $485. If it is the original creditor, according to the current price, the BTC price has increased by 120 times; the amount of BTC paid by Mentougou is about 20% of the original amount held, so the profit is about 24 times. Even if it is a debt acquisition, there is more than 10 times the profit. In addition, the debt acquisition agency may hold more BTC. It is optimistic about BTC in the long term and will not sell all of it.
From the perspective of holders, during the long litigation process, the widespread debt trading market has given paper creditors ample opportunities to exit. Those who are willing to buy debts should be more likely to be long-term BTC holders.
Assuming that 75% of the people accept early lump-sum repayment, the total number of BTC repaid is 105,750, with a discount of 11%, and the actual number of BTC used for repayment is 94,117. Assuming a selling ratio of 30%, 50%, and 70%, and a selling time of 1 to 3 months, the number of BTC sold under different circumstances can be calculated.
How much impact does this supply have on the market? We can refer to the recent BTC supply caused by the German government and the demand for BTC ETFs during this period for further analysis.
Comparing the market impact of Dezi's BTC salesDezi started selling his 50,000 BTC through centralized exchanges since June 19. As of July 12, there were 6,394 BTC left in his address, which means that he sold about 43,700 BTC in 23 days, which is worth about $2.4 billion at $55,000.
During this period, the maximum drop in the daily line was about 19% (from 66400 to 53500), and the daily line body column dropped by about 14% (from 64800 to 55900). The largest single-day drop occurred on July 5, when Mentougou transferred 47,000 tokens (of which only 1,500 entered the exchange). Under the double pressure, BTC dropped to 53.5K on July 5, with a single-day drop of 8.5%, which was the lowest point of this round of decline. After July 6, BTC rebounded, reaching a high of around 59500.
Combined with the transfer of the German government’s tokens, it can be clearly seen that the market’s expectations of a fall in token sales precede the actual sale of tokens. When the German government began to transfer out BTC in small amounts, the market continued to fall.
From June 19 to July 7, a total of 18 days, the German government sold approximately 10,000 BTC, with an average of 556 tokens sold per day.
On July 5, after the double pressure of the German government and Mentougou, the actual selling pressure from the German government increased, but the market's ability to absorb it also increased.
On July 8, the German government sold nearly 13,000 BTC. The market did not break the previous low and closed higher on the daily chart.
From July 8 to July 12, the German government outflowed about 33,700 tokens, and BTC has been fluctuating between 54K and 60K.
BTC ETF Demand AnalysisBTC ETF is a relatively stable buy in the current market. During the period when the German government sold tokens, there were 15 working days from June 19 to July 10. During the 15 days, the ETF had 6 days of net selling, selling $470 million; there were 9 days of net buying, buying $1.07 billion, with a net inflow of $600 million and a daily average of $43 million. The main purchases occurred after July 5, with a total of more than $800 million in purchases.
As mentioned above, the German government sold a total of 40,000 tokens to the market during this period, about $2.4 billion. Therefore, the demand for BTC ETF was not enough to provide sufficient support, and the market price fell.
in conclusionIf the compensation from Mentougou is sold out within a month, the selling pressure faced by the market will be similar to that of the German government, with similar sales in terms of quantity and timing. According to the current demand for ETFs, there will be no sufficient support, and the price of BTC may fall further.
If the compensation of Mentougou lasts longer (2-3 months), the amount of BTC entering the market every day will not be particularly large, and it will not cause a one-time decline. However, due to the continued expectation of selling pressure, there may be a period of shocks to digest the selling pressure. This also means that it is difficult for the main rising wave to come in the short term.
Currently, only 1,545 Mentougou tokens have actually been transferred to the exchange, and the remaining tokens are still in Mentougou’s account. It can be considered that the actual selling pressure has not yet entered the market. When the BTC held by Mentougou is distributed on a large scale to several exchange addresses, it may cause a large panic drop, thus forming a plunge pin. When specific individuals sell, due to the dispersion and difficulty in tracking and observing, it may not necessarily cause a significant drop in price.
Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together.