Bitcoin

Bitcoin Braces for Impact as Mt. Gox and US Government Prepare to Sell Off

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Defunct cryptocurrency exchange Mt. Gox is reportedly planning to move its remaining 80,500 Bitcoins as Bitcoin struggles to break above the $70,000 level. Over the past two weeks, it has transferred nearly 50,000 Bitcoins to lenders on Kraken and Bitstamp. While lenders faced some withdrawal issues on the exchange last week, those issues have largely been resolved.

What should you expect from now on?

Test transfers suggest larger moves

According to data from Arkham Intelligence, a Mt. Gox address (12Rgp) transferred 0.02 BTC, worth $1350, to another address starting with 1Adb. The same address also transferred 0.0001 BTC to an address starting with bc1q. These transactions suggest that Mt. Gox is conducting test transfers before moving the remaining 80,128 BTC it holds, valued at $5.35 billion.

Mt. Gox creditors appear to be holding on to their BTC with “diamond hands.” Despite the recent volatility, Bitcoin’s price has managed to absorb much of the selling pressure. However, on Monday evening, BTC came under pressure again after facing rejection at the $70,000 level.

Bold predictions

After surpassing $70,000, popular market analysts like PlanB predicted that the Bitcoin price rally could extend to $150,000 by the end of the year. PlanB also predicted that the price of Bitcoin would double in the next 3-5 months.

US Government Moves on Bitcoin

Adding to the market pressure is the US government’s Bitcoin transfer. Arkham Intelligence reports that the US government moved 29,799.99 BTC, worth $2 billion, to an unknown P2WPKH wallet on Monday. Despite this transfer, the US government wallet still holds 183,439 BTC, worth over $12 billion.

This development follows former President Donald Trump’s strategy to retain 100% of all Bitcoin that the US government currently holds or acquires in the future if he is re-elected. However, the latest BTC transfer by the US government has fueled speculation of a major sell-off, as signaled by Peter Schiff in his latest tweet.

$5.52 billion transfers from Mt. Gox

Mt. Gox recently executed a series of Bitcoin transfers totaling around $5.52 billion. After conducting preliminary test transactions, the exchange moved $2.85 billion worth of Bitcoin to an undisclosed wallet. It later transferred another $2.47 billion from a cold storage wallet to an unknown address, while also internally transferring a portion of its Bitcoin holdings between cold wallets.

Technical analysis

On the technical side, analysts predict that if the $65,800 level holds, BTC could recover to $67,400 or $68,100. This week, the US Federal Reserve meeting will take place, and Chairman Jerome Powell will address inflation and the central bank’s plans for rate cuts.

With Mt. Gox and the US government holding such significant reserves of Bitcoin, is a market crash imminent? Join the conversation.

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