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mt. Gox Rumors Panic Bitcoin Twitter as BTC Price Returns Below $20K

Bitcoin (BTC) failed to hold $20,000 on Aug. 27 as fears of a sell-off by users of the defunct Mount Gox exchange increased price pressure.

BTC/USD 1-day candlestick chart (bit stamp). Source: TradingView

mt. Gox rumors dismissed as “typical crypto”

Data from UKTN Markets Pro and TradingView tracked BTC/USD heading to new lows in six weeks, reaching $19,766 on Bitstamp.

Thin weekend liquidity appeared to exacerbate already twitchy markets, which reacted poorly to unconfirmed rumors that Mt Gox funds would be released to creditors on August 28.

The claims have varied widely at the time of writing, with some believing that an tranche of 137,000 BTC would be released at once. Others said the money would be sent piecemeal, but payouts would begin this weekend nonetheless.

A point of consensus came in the form of creditors who reportedly wanted to sell BTC owed to them, which had been out of reach since 2014, when BTC/USD traded for less than $500. The unrealized 40X returns, they feared, would prove too attractive for creditors to become willing hodlers.

Mount Gox imploded nearly ten years ago with hundreds of thousands of bitcoins. After a lengthy legal process regarding funds subsequently recovered from the exchange, designated rehabilitation manager, Nobuaki Kobayashi, announced on July 6 that he was “preparing for repayments” to creditors.

In the documentation at the time, Kobayashi listed “late August” as the reference period in which some first payments could begin.

“After discussions with the court and in accordance with the Rehabilitation Plan, the Rehabilitation Trustee intends to determine the allocation etc. Restriction reference period from approximately the end of August this year until all or part of the repayments made as initial repayments have been completed for secure refunds,” part of it read.

However, with no new official information appearing on the dedicated website about the rehabilitation proceedings, it remained unclear why the rumors of the sale had gained such traction so quickly.

Meanwhile, for trader and analyst Josh Rager, even if the entire stock of BTC were to be sold in one go, the resulting selling pressure would not create the kind of apocalyptic event that some had envisioned.

“The fear surrounding the release of, possibly, the Mt. Gox Bitcoins is simply unfounded,” UKTN contributor Michaël van de Poppe added.

“Typical Cryptography.”

Profits are weighed down by weekend volatility

The latest losses nevertheless caused more pain for existing BTC hodlers.

Related: US Stocks Lose $1.25T a Day – More Than the Entire Crypto Market Cap

According to data of the on-chain analytics firm Glassnode, the percentage of total BTC supply in profit on the day hit a month-long low at just over 55%.

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Older Coins continued a trend of increasing dormancy, with the percentage of supply last leaving its wallet reaching a 10-month high two years ago or more.

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UKTN recently reported that hodler habits remained largely unchanged despite the crypto market’s decline in 2022.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of UKTN.com. Every investment and trading move carries risks, you should do your own research when making a decision.

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