Author: Fu He Huo, Odaily Planet Daily
At noon today, Bitcoin briefly fell below 54,000 USDT, reaching a low of 53,269 USDT, a new low since February 26 this year. The maximum 24-hour drop was over 10%. As of press time, it has rebounded to 64,600 USDT. The altcoins were even more "terrible", with an average drop of about 10%. The real-time market of OKX is as follows:
ETH once fell to 2806 USDT, and is currently reported at 2881.61 USDT, with a 24-hour drop of 8.01%;
SOL once fell to 120.65 USDT, and is currently reported at 126.74 USDT, a 24-hour drop of 6.38%;
PEPE once fell to 0.000008221 USDT, and is currently reported at 0.000008326 USDT, with a 24-hour drop of 12.58%;
OP fell to as low as 1.22 USDT, and is currently reported at 1.3232 USDT, with a 24-hour drop of 13.36%;
STRK once fell to 0.4488 USDT, and is currently reported at 0.4951 USDT, with a 24-hour drop of 15.76%;
CoinGecko data shows that due to the overall market decline, the total market value of cryptocurrencies has shrunk to US$2.08 trillion, a 24-hour drop of 9%.
In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the total amount of liquidation in the entire network has reached 678 million US dollars, most of which are long orders, amounting to 588 million US dollars. Among them, BTC liquidation amounted to 226 million US dollars and ETH liquidation amounted to 166 million.
Mt.Gox repayments, US and German shipments, ETF outflows
This round of downward trend is mainly due to the repayment of "Mt.Gox" and the BTC shipments by the US and German governments.
After multiple Mt.Gox wallets participated in a small transfer test yesterday, this morning Mt.Gox (address starting with 1 HeHLv) transferred more than 47,228.7 BTC to a new address (starting with 1L7Xbx), worth about $2.71 billion. Subsequently, the address transferred more than 47,200 BTC to 2 addresses, including:
Transfer 44,500 BTC ($2.55 billion) to address 16 ArP 3...VqdF;
Transferred 2,700 BTC ($154.8 million) to its internal address 1 JbezD...APs 6.
According to the monitoring of on-chain analyst @ai_ 9684 xtpa, Mt.Gox transferred 1,544 BTC to the new address 1 PKGG...szwzV (worth $84.87 million) two hours ago, which is suspected to belong to the exchange Bitbank. This move indicates that Mt.Gox is shipping, and Bitcoin also fell in response, falling to 53,269 USDT. Mt.Gox's multiple token transfers in the past two days have intensified the market's panic about its sell-off, which has become the main factor causing today's market decline.
In addition, on-chain data shows that in recent days, the German government has recently transferred more than $195 million worth of Bitcoin to various crypto exchanges, including Coinbase, Kraken and Bitstamp, which has exacerbated market volatility. And, according to Arkham monitoring, the US government wallet address (starting with 349c6) transferred 237 BTC to the address starting with bc1qvc yesterday afternoon, equivalent to $13.67 million. The changes in the currency holding addresses of the US and German governments have also exacerbated market concerns about future market conditions.
In addition, Bitcoin ETF spot has also seen net outflows in recent trading days, with 9 Bitcoin ETFs reducing their holdings by a total of 609 Bitcoins, worth approximately $35 million. According to CryptoQuant data, approximately $2.4 billion worth of Bitcoin with a holding period of 3-6 months was transferred during this decline. Analyst Cauê Oliveira pointed out that this represents the selling pressure of some entities that purchased at the beginning of the year, or that speculators targeting Bitcoin ETFs and halving expectations are being cleansed.
Due to the combined effect of multiple factors, the crypto market fell further.
Future expectations: Trump's inauguration may change the market downturn
The main reason for this round of downward trend is the Mt.Gox shipment, but the market may have exaggerated its impact.
Vijay Ayyar, head of consumer growth for Asia Pacific at Gemini, said the overall impact of Mt. Gox's cryptocurrency repayments could be "spread" given the variety of recipients. On the one hand, some individual holders will receive bitcoin immediately, while on the other hand, "a large amount" of bitcoin will be paid to claims funds. Those funds will then distribute the cryptocurrency to their limited partners, so the whole process may take some time, which will add a time factor to the price impact.
And Alex Thorn, head of research at Galaxy, also holds the same view, believing that the amount of Bitcoin that will eventually be compensated by Mt.Gox will be less than people think, which means that the selling pressure will be less than the market expects. Moreover, the vast majority of creditors he has talked to said that they will be paid in kind, that is, in the form of cryptocurrency rather than legal currency, and they will also mainly hold these assets and believe that this group of people will not sell in large quantities.
In addition, JPMorgan analysts said that the Mt.Gox repayment may put pressure on the crypto market initially (while it is ongoing), but the market may recover from August. Because FTX repayment is about to take place afterwards, creditors are likely to reinvest funds in crypto assets.
Wintermute founder and CEO Evgeny Gaevoy posted on X: "Hold on, the current market is just a seasonal phenomenon in the summer. The market will recover in August and September, before the US election."
Another factor that contributed to the downward trend was the German government’s sales. In response, TRON founder Justin Sun posted on the X platform that he was willing to negotiate with the German government to purchase all of its BTC off-site to minimize the impact on the market. At the same time, German MP Joana Cotar strongly criticized the government’s move to sell a large number of Bitcoins. She said the German government should reconsider this strategy and discuss with the United States the use of Bitcoin as a strategic reserve currency.
As for ETF fund outflows, compared with the net outflows in the previous few weeks, yesterday's outflows were more of a market adjustment.
Ki Young Ju, founder and CEO of CryptoQuant, said that this round of cycle is different, the source of funds is different, and the spot Bitcoin ETF currently accounts for a quarter of the total spot trading volume, which means that the new funds entering the market are more mature than ever before, and I believe there will be more mature funds in the future. Mature funds usually have diamond hands, and there are still many institutional capitals waiting to enter the field, and the channel is now open for them.
The most important factors affecting future market trends are the results of the US election and expectations of a rate cut by the Federal Reserve.
Market analysts believe that if Trump wins the election, the Russia-Ukraine war may come to an end, and the end of the Russia-Ukraine war will inevitably bring about an increase in the global market, and the crypto market may usher in a wave of increases. In addition, as a crypto-friendly person, Trump may further increase the mainstream acceptance of the crypto industry after taking office, thereby enhancing the positive expectations of the crypto industry.
In addition, the Fed's interest rate cut expectations are a major positive that the market has been looking forward to this year. Fed Chairman Powell has expressed his views on interest rate cuts in 2024 on different occasions. In a speech in April, he mentioned that a cautious attitude should be taken towards interest rate cuts, and said that it "may be appropriate" to start cutting interest rates that year. In addition, he may give a clearer hint on the timetable for interest rate cuts at the June FOMC meeting.
In general, the current market downturn is already evident. Apart from the Federal Reserve’s announcement of a rate cut, we can only look forward to the positive effects brought about by the progress of the US election. As of now, Trump’s chances of winning are still relatively high, and we look forward to an increase in the market in November.