Key Takeaways
What’s behind the latest $1 billion transfers?
A small portion was sold, but it is not clear whether the $953 million BTC would also be dumped.
Is recovery possible before the end of the year?
Yes, according to Citi’s head of Macro Research and Arthur Hayes, citing a likely improvement in the liquidity environment.
Failed stock exchange Mount Gox has rocked the market after moving about $1 billion worth of shares Bitcoin [BTC].
At the time of writing, on-chain facts showed that the estate moved 10.6k BTC (worth $953 million) from a cold wallet (1DcoA) to a new wallet (1ANkD). That’s not all, as another 185.5 BTC, worth $16.8 million, was sold via Kraken Exchange.
Source:
Will there be further selling pressure?
The latest transfer between wallets took place after an eight-month period of dormancy, raising further concerns about the motive. In most cases, such movements, especially between cold wallets and eventually to hot wallets, always precede offloading. However, it could also just be a transfer to a more secure wallet.
The Mount Gox estate extended the final repayment until October 31, 2026 due to unresolved creditor issues. It started compensation in July 2024 and had 142,000 BTC at that time.
Since then, it has liquidated most of the supply and now owns 34.6k BTC, worth $3.14 billion at current market prices.
That said, any confirmed sell-off from the estate could drag down already distressed markets even further.
Since October, BTC has fallen 29%, from $126k to $89.2k. This is the third time the price has fallen 30% this cycle and falls within the normal declines during bull runs.
Source: BTC/USD, TradingView
Although the price has broken below key bull market support levels such as the 365-Daily Moving Average, analysts believe it is a temporary liquidity crisis.
According to Dirk Willerhead of Macro Strategy at Citibank, liquidity conditions could soon reset and give BTC a boost.
“Going forward, the liquidity crisis for Bitcoin should improve between now and the end of the year.”
This is one macro outlook similar to the one shared by BitMEX founder Arthur Hayes. However, Hayes expects BTC to fall to $80,000-$85,000 before a possible reversal to $200,000 as liquidity improves.
However, amid the uncertainty, whales holding over 1000 BTC increased their positions during the correction period. Bids rose as BTC fell below $110,000 and more aggressive accumulation followed a dip below $100,000.
Source: Glassnode
In other words, some players saw the pullback and panic selling as an opportunity to grab BTC at a discount.