Original | Odaily Planet Daily
Author | How about husband
At noon today, Bitcoin briefly fell below 54,000 USDT, reaching a low of 53,269 USDT, hitting a new low since February 26th this year, with a maximum 24-hour decline of over 10%. As of the time of publication, it has rebounded to 64,600 USDT. The altcoins are even more "miserable," with an average decline of around 10%. The real-time prices on OKX are as follows:
ETH fell to a low of 2,806 USDT at one point, currently at 2,881.61 USDT, with a 24-hour decline of 8.01%;
SOL fell to a low of 120.65 USDT at one point, currently at 126.74 USDT, with a 24-hour decline of 6.38%;
PEPE fell to a low of 0.000008221 USDT at one point, currently at 0.000008326 USDT, with a 24-hour decline of 12.58%;
OP fell to a low of 1.22 USDT at one point, currently at 1.3232 USDT, with a 24-hour decline of 13.36%;
STRK fell to a low of 0.4488 USDT at one point, currently at 0.4951 USDT, with a 24-hour decline of 15.76%;
CoinGecko data shows that due to the overall market downturn, the total market value of cryptocurrencies has shrunk to 2.08 trillion US dollars, with a 9% decline in 24 hours.
In terms of derivative trading, Coinglass data shows that in the past 24 hours, the total amount of liquidation across the network has reached as high as 678 million US dollars, with the vast majority being long positions, amounting to 5.88 billion US dollars. Among them, the liquidation of BTC amounted to 226 million US dollars, and the liquidation of ETH amounted to 166 million US dollars.
Mt.Gox repayment, BTC outflow from the US and Germany, ETF outflow
The main reason for the current market downturn is mainly due to the "Mt.Gox" repayment and the BTC outflow from the US and Germany.
After multiple Mt.Gox wallets participated in small-value transfer tests yesterday, this morning, Mt.Gox (address starting with 1HeHLv) transferred over 47,228.7 BTC to a new address (starting with 1L7Xbx), worth about 2.71 billion US dollars. Subsequently, this address transferred over 47,200 BTC to 2 addresses, including:
- Transferring 44,500 BTC (25.5 billion US dollars) to the address 16ArP3…VqdF;
- Transferring 2,700 BTC (154.8 million US dollars) to its internal address 1JbezD…APs6.
According to on-chain analyst @ai_9684xtpa, two hours ago, Mt.Gox transferred 1,544 BTC to a new address 1PKGG…szwzV (worth 84.87 million US dollars), which is suspected to belong to the exchange Bitbank. This move signifies that Mt.Gox is selling off, and Bitcoin also fell in response, dropping to 53,269 USDT. Mt.Gox's multiple token transfers in the past two days have intensified market panic about its sell-off, thereby becoming the main factor causing today's market downturn.
In addition, on-chain data shows that in recent days, the German government has transferred over 195 million US dollars worth of Bitcoin to various cryptocurrency exchanges, including Coinbase, Kraken, and Bitstamp, intensifying market fluctuations. Furthermore, according to Arkham monitoring, the US government wallet address (starting with 349c6) transferred 237 BTC to the address starting with bc1qvc yesterday afternoon, equivalent to 13.67 million US dollars. The abnormal movements of the holding addresses of the US and German governments have also intensified market concerns about future market trends.
In addition to the above, Bitcoin ETF spot has also seen a net outflow in the past few trading days, with a total reduction of 609 BTC across 9 Bitcoin ETFs, worth about 35 million US dollars. According to CryptoQuant data, in this downturn, about 2.4 billion US dollars worth of Bitcoin with a holding period of 3-6 months has been transferred. Analyst Cauê Oliveira pointed out that this represents the selling pressure from some entities who bought at the beginning of the year, or speculators targeting Bitcoin ETFs and halving expectations being washed out.
Under the combined influence of multiple factors, the cryptocurrency market has further declined.
Future expectations: Trump's inauguration may change the market downturn
The main reason for the current market downturn is Mt.Gox's sell-off, but the market may have exaggerated its impact.
Vijay Ayyar, Asia Pacific Managing Director of Gemini, stated that given the diverse recipients of the payments, the overall impact of Mt. Gox's repayment in cryptocurrencies may be "diversified." On the one hand, some individual holders will immediately receive Bitcoin, while on the other hand, "a large amount" of Bitcoin will be paid to the claims fund. The fund will then distribute cryptocurrencies to their limited partners, so the entire process may take some time, adding a time factor to the impact on prices.
Galaxy Research Director Alex Thorn also holds the same view, believing that the final amount of Bitcoin obtained from Mt.Gox's compensation will be less than people imagine, which means that the selling pressure will be smaller than the market expects. Moreover, the vast majority of creditors he has spoken to have stated that they will receive payment in physical form, in the form of cryptocurrencies rather than fiat currency, and they will mainly hold these assets, believing that this group of people will not engage in large-scale selling.
In addition, analysts at JPMorgan Chase stated that Mt.Gox's repayment may bring pressure to the cryptocurrency market initially, but the market may recover from August onwards. This is because the FTX repayment will take place after that, and creditors may reinvest the funds in cryptocurrency assets.
Evgeny Gaevoy, Founder and CEO of Wintermute, stated in a post on X, "Stay calm, the current market situation is just a seasonal phenomenon in the summer. The market will recover in August and September, before the US election."
Another factor contributing to the market downturn is the outflow of Bitcoin from the German government. In response to this, Tron founder Justin Sun stated on X that he is willing to negotiate with the German government to purchase all of their BTC off the market, in order to minimize the impact on the market. At the same time, German parliament member Joana Cotar strongly criticized the government's large-scale sale of Bitcoin. She stated that the German government should reconsider this strategy and discuss comparing Bitcoin as a strategic reserve currency with the United States.
As for the outflow of ETF funds, compared to the continuous net outflow of funds in the previous weeks, yesterday's outflow was more of a market adjustment.
Ki Young Ju, Founder and CEO of CryptoQuant, stated that in this cycle, the sources of funds are different, and spot Bitcoin ETFs currently account for one-fourth of the total spot trading volume, which means that new entrants' funds are more mature than ever before, and it is believed that more mature funds will enter the market in the future. Mature funds usually have diamond hands, and there are still many institutional capitals waiting to enter this field, and the channels are now open to them.
The most important factors affecting future market trends are the results of the US election and the expectation of a rate cut by the Federal Reserve.
Market analysis believes that if Trump is re-elected, the end of the Russia-Ukraine war may lead to a global overall market uptrend, and the cryptocurrency market may usher in a wave of uptrend. In addition, as a cryptocurrency-friendly person, Trump's inauguration may further increase the mainstream acceptance of the cryptocurrency industry, thereby enhancing the positive expectations for the cryptocurrency industry.
In addition, the expectation of a rate cut by the Federal Reserve has been a major positive expectation for the market this year. Federal Reserve Chairman Powell has expressed views on a rate cut in 2024 on different occasions. In a speech in April, he mentioned that a cautious approach should be taken to rate cuts, and stated that starting rate cuts in the same year "may be appropriate." In addition, he may give a clearer indication of the timing of rate cuts at the FOMC meeting in June.
In summary, the current market downturn is evident, and apart from the announcement of a rate cut by the Federal Reserve, the only hope is for the positive impact brought by the progress of the US election; at present, Trump's chances of winning are still relatively high, and the market is expected to rise in November.
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