How much impact will the compensation distribution of Mt.Gox have on the market?
Let's review the process and market reaction of the German government's selling of nearly 50,000 BTC in late June and early July. At that time, the market was in a state where there were almost no interference factors, which was an excellent observation sample.
As can be seen from the above figure, BTC began to peak and fall more than 10 days before the German government sold it, and reacted in advance. The local high point on June 6-7 before the decline was about 72k. This reflects the fact that the financial market will react in advance to future news.
When BTC hit the bottom of 53k locally on July 5, the German government was actually just cautiously shipping and had not had time to sell it in large quantities. It can be seen that the market will try to let the seller sell at a lower price.
When the German government finally started to liquidate on July 8, BTC only pulled back to 54k twice, and then began to rebound and rise sharply as the German government completed its liquidation.
In fact, when the bottom reached 53k on July 5, the market had already fully priced in the liquidation of the Deutsche Bank.
From 72k to 53k, it retreated about 20,000 dollars, cutting more than 1/4.
In this view, the market had already responded to the distribution of Mt.Gox in advance after reaching the local high of 68k on July 22.
Only by using an extremely rough method to estimate: Deutsche Bank sold from 72k to 53k, with an average of 62.5k, multiplied by 50,000 BTC, it can be seen that the market's pressure purchasing power for digesting this part of the additional selling pressure is about 3.125 billion dollars. This time, the 43,000 BTC distributed by Kraken has been digested. At present, it has retreated from 68k to 65k, with an average of 66.5k, and the multiplication results in a selling pressure of 2.86 billion dollars.
If there are no other unexpected factors, the depth of this callback will surely not be lower than the 53k sold by Deutsche Bank. There are three reasons: First, the total amount of 43,000 is nearly 15% less than 50,000; second, the callback starting point of 68k is lower than 72k, which has less overdraft on the market funds; third, the positions are more dispersed after this distribution, and the selling pressure is more even.
However, according to the previous announcement, the remaining more than 90,000 BTC of Mt.Gox will be distributed in the future, and the selling pressure will continue until the end of October. It is estimated that a total of about 4.6 billion dollars of selling pressure will be released to the market.
