Bitcoin (BTC) lost support at $20,000 on Aug. 27 due to concerns about a potential sell-off by former users of the now-defunct exchange Mt. Gox.
Rumors Regarding Mt. Gox Dismissed as Typical Cryptocurrency Market Behavior
BTC/USD fell to a new low of $19,766 on Bitstamp, with limited trading activity over the weekend contributing to the already volatile market environment. Unconfirmed speculations suggested that Mt. Gox might release funds to creditors on Aug. 28, creating anxiety among investors.
There were conflicting reports, some indicating a large release of 137,000 BTC in one go, while others suggested gradual payouts starting over the weekend. Creditors, who have been waiting to access their BTC since the exchange’s collapse in 2014, were tempted to sell, given the significant increase in Bitcoin’s value since then.
With extensive legal proceedings surrounding Mt. Gox’s insolvency, the rehabilitation trustee, Nobuaki Kobayashi, hinted at potential repayments starting by the end of August. Despite the lack of official updates on the repayment process, rumors of a potential sell-off circulated rapidly.
Those opting for early partial payments will receive a portion of their bitcoin. Full repayments for others will take years.
— Danny Devan (@dannydevan) August 27, 2022
According to trader Josh Rager, even if a substantial amount of BTC were to be sold at once, it would not cause the catastrophic scenario that some feared.
The fear surrounding the Mt. Gox Bitcoin release is exaggerated.
140k BTC = $2.8B
BTC daily trade volume $20B to $30B
These BTC will not flood the market all at once https://t.co/ZLBh0HVIgs
— Rager (@Rager) August 27, 2022
Contributor Michaël van de Poppe echoed this sentiment by describing the situation as “typical crypto.”
Market Volatility Impacts Bitcoin Profits
The drop in Bitcoin’s price added pressure on existing hodlers, with data suggesting that only slightly above 55% of BTC holders were in profit.
Amid the market downturn, long-dormant older coins witnessed increased activity, with a higher percentage of coins untouched for over two years reaching a ten-month peak.
Cointelegraph previously highlighted the persistence of hodlers despite the ongoing turbulence in the crypto market in 2022.
The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment decisions carry risks, so it is essential to conduct thorough research before making any financial decisions.
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