Bitcoin has not yet bottomed out? Analyst: Potential selling pressure from Mt. Gox and the German government, BTC may still fall by more than 10%
Mt. Gox, once the world's largest Bitcoin exchange, started to repay in July. In addition, the German and US governments have recently transferred large amounts of Bitcoin to exchanges, suspected of selling coins for cash. The two are considered by the market to be the culprits that dragged down Bitcoin's recent trend. As for how big the selling pressure is and whether the market will face a major flash crash, analyst Alex Krüger published an analysis on the X platform.
German government enters the final selling stage
Alex Krüger said that since the German government held 50,000 Bitcoins at the end of June this year, it has begun to gradually sell these Bitcoins. Starting from June 19, they sold them in small batches. Today (9), they have greatly accelerated the sales process and transferred 16,038 Bitcoins to distributors and exchanges. The resulting selling pressure also caused the Bitcoin price to fall by 3.5% (US$2,000).
Mt.Gox will bring another drop of more than 10%
The scale of the German government's sell-off has attracted market attention, but how to predict the repayment selling pressure of Mt. Gox until October? Alex Krüger analyzed the 141,000 bitcoins to be distributed in the Mt. Gox incident, and pointed out that 95,000 of them will be distributed within 90 days to creditors who choose to distribute in advance and accept a 10% reduction. The distribution of these 95,000 bitcoins is as follows:
20,000 are allocated to the trust fund
10,000 are allocated to an exchange in New Zealand (currently in bankruptcy proceedings and will not flow into the market)
65,000 are allocated to individual creditors
Therefore, Alex Krüger estimates the market reaction based on the following assumptions:
Assuming that 30% of the 85,000 are sold (about 25,500 bitcoins)
Assuming that Mt. Gox Creditors sell off the 30% all at once, not in a dispersed manner
Assuming the quantity/price relationship is linear
Given the recent decline in Bitcoin prices caused by the German government's sell-off, Alex Krüger believes that if the crypto market absorbs all of Mt. Gox and the German government's subsequent Bitcoins at once, it will trigger a 10.5% crash, which means Bitcoin will fall by about $6,000.
However, Alex Krüger said that although large-scale sell-offs will cause a short-term impact on the market, due to the market's own liquidity and past experience, the market is able to withstand and eventually stabilize.
