Mt.Gox compensation sell-off may not come yet, Trump's huge promise stimulates the crypto market to rise sharply
In late July, Bitcoin staged a wonderful comeback. First, Mt.Gox paid nearly half of its losses, triggering a sell-off (from July 22 to July 25). Then, Trump’s impassioned speech at the Bitcoin Conference directly blew up the shorts. However, judging from the current on-chain data, the actual selling pressure of Mt.Gox has not yet arrived. Let’s briefly sort out this event line.
On July 16, Mt.Gox trustee Nobuaki Kobayashi issued a notice: Following July 5, 2024, on July 16, 2024, the Mt.Gox trustee repaid Bitcoin and Bitcoin Cash to some creditors through some designated cryptocurrency exchanges, etc., according to the plan. So far, the trustee has repaid these assets to more than 13,000 creditors. Kraken said in an email that it has successfully received funds from creditors from the Mt.Gox trustee (48,641 BTC received from Mt.Gox). The platform will strive to distribute funds as soon as possible, and it is expected that they will be deposited into the corresponding accounts within 7-14 days. The amount received by users has been determined by the trustee, and the platform will distribute it according to their instructions.
On July 24, Dave Ripley, CEO of the crypto exchange Kraken, posted on the X platform that “Kraken has successfully distributed BTC and BCH from Mt. Gox assets to creditors. It has been nearly 10 years since Kraken was selected by the custodian to assist in the investigation and return of customer funds. This is our honor and our responsibility.”
On July 25, CryptoQuant founder and CEO Ki Young Ju posted on the X platform that after providing repayments to Mt.Gox creditors, Kraken's spot Bitcoin trading volume was normal and Mt.Gox creditor selling was not happening at the moment. Ki Young Ju said that any price drop was likely due to market sentiment rather than Mt.Gox selling.
On July 26, cryptocurrency exchange Bitstamp announced on X Platform that after completing a security check, the trust assets that Bitstamp distributed to Mt. Gox creditors and deposited with Bitstamp are now fully available. For customers in the UK, a separate distribution plan will be made. Once more information is received from the Mt. Gox trustee, relevant customers will be notified immediately.
From July 26 to July 27, Trump attended the 2024 Bitcoin Conference as a top guest. Under the watchful eyes of the public, he made a series of "sweet talk" promises in the eyes of crypto enthusiasts, expressing his "love" for Bitcoin almost unreservedly. Trump said that the market value of Bitcoin will exceed that of gold, and that after being elected, he will force the crypto-unfriendly SEC chairman to step down, and will also retain the government-pledged Bitcoin as a strategic reserve, etc.
Retail investors are different from government agencies in that their selling is mostly unplanned and they are more easily affected by market sentiment. Due to Trump's extremely positive remarks and his huge influence, retail investors value their chips more, so this article believes that the actual selling pressure from Mt.Gox has not yet arrived. In a sense, it is difficult to have uniformity and specific quantification of retail investors' selling pressure. When the price is too high, some chips may be sold. However, what is really worth paying attention to is the next large compensation from Mt.Gox officials. According to the official plan, most of the compensation will be completed within 2 months, and the official may not want to make the compensation time interval too close. Considering the current trend of Bitcoin, it may be possible to complete the compensation of other major customers in mid-to-late August.
August macro data is very important, which may help Bitcoin to perform a golden September and silver October
There is currently a strong market expectation that the Federal Reserve will cut interest rates in September. On July 28, Nick Timiraos, the "Federal Reserve Megaphone", wrote in his latest article that although Federal Reserve officials are unlikely to cut interest rates next week, developments in inflation and the labor market should lead officials to signal a rate cut at the September meeting. Powell, who prefers to act early, has been weighing the risks of cutting interest rates too early and waiting too long, an issue that will be addressed at next week's meeting. Officials hope to have more evidence that inflation is indeed cooling before crossing the threshold for rate cuts. Despite this, officials are increasingly concerned that waiting too long will lead to a soft landing bubble. The Fed's preparation to cut interest rates reflects three factors: favorable inflation, a cooling job market, and a changing consideration of the dual risks of allowing inflation to remain at too high a level and causing unnecessary economic weakness.
Regarding this kind of optimistic market forecast, we can maintain a positive attitude of optimism. However, according to the Fed's previous remarks, more data support may be the most important. If macro data improves, this could be a boost for Bitcoin. On July 29, 10x Research posted on social media that based on historical data analysis, Bitcoin’s returns flattened in August and declined in September. However, tailwinds from U.S. interest rate policy, falling interest rates, and the election calendar are likely to cushion any downward pressure on the $1 billion token unlock in August. Bitcoin dominance is creating new highs this cycle and is having a significant impact. It believes that Bitcoin is expected to eventually break through to new highs, but Bitcoin may need "macro" help. The Federal Reserve interest rate resolution on August 1 and the CPI report on August 14 will be crucial.
This article can make two assumptions: If the August data is positive and the Fed eventually cuts interest rates as scheduled in September, then Bitcoin will undoubtedly be in the golden September and silver October; if the Fed continues to maintain the current interest rate, this article predicts that in late August, the Mt.Gox sell-off may create selling pressure on the crypto market, and this is an excellent time to enter the market. As September approaches and the US election approaches, Trump's positive attitude is likely to continue to drive Bitcoin up sharply.
As the cycle shows, August may be a suitable entry point
Bitcoin is halved every four years and has a strong cyclicality. This article will make some predictions about the future of Bitcoin from a cyclical perspective.
Digital Asset Research published a research article that believes the period from August 6 to 12 will be a key node, which is the last low before the big rise. Looking at the monthly chart, the previous two cycles are almost identical to the current cycle. 33 months from the major high and 20 months from the major low put us in this period from July to September, which is the last low before the big rise.
With the exception of 2012, the previous two cycles saw prices rise just over 200% from the bear market low, right in the timeframe we are now in. In reality, time and price are exactly where they should be, neither overextended nor over-expected as some commentators have suggested.
As you can see, there is almost always a sharp rise in August followed by a rapid fall, which can be as much as 20-50%. Last year was different from the other three charts because it was only the second year of the cycle, but it shows the seasonality of this type of move occurring in August.
Taking into account price range, time frame, time perspective and seasonal factors, it believes that the crypto market is approaching a mid-August window that is likely to serve as a trigger point for BTC.
Crypto analyst CryptoChan believes that BTC 100,000 is expected in October 2024. The current black line (BTC: MVRV indicator from 21 years to now) and the red line (BTC: MVRV indicator from 13 years to 17 years) are still closely linked in the big cycle. If the black line can reach 2.54 in October, and the current Realized Price (excluding the unmoved chips on the chain for more than 7 years) is 39,583, then the coin price will be at least ≥ 100,000 (2.54 * 39,583). The black line in the figure is the [21 years to now] segment of the BTC: MVRV indicator, and the red line is the [13-17 years] segment of the BTC: MVRV indicator. The two lines align the BTC mining output of each cycle by half. Note: MVRV (Market Value to Realized Value) refers to the ratio of the BTC market price to the overall average purchase price of BTC on the chain. The MVRV in the figure is a personal modified version, which excludes BTC on the chain that has not been moved for more than 7 years from the calculation as long-term dormancy or loss.
Summarize
From a cyclical perspective, we can draw two conclusions worth learning from: 1) August 6 to 12 will be a critical node, during which there may be certain seasonal large fluctuations; 2) Bitcoin will have a golden September and silver October, and is even expected to break through $100,000.
