The defunct Bitcoin exchange Mt. Gox finally announced the final date to begin refunding Bitcoin and Bitcoin Cash (BCH) to affected customers, starting this week.
This highly anticipated announcement has raised concerns in the cryptocurrency community regarding the potential contribution of these customers to the ongoing selling pressure in the Bitcoin market.
Experts confident of absorbing Mt. Gox liquidation potential
While some analysts express apprehensions about potential Bitcoin losses, they generally agree that any Mt. Gox-related liquidation concerns are likely to be contained and short-lived.
Lennix Lai, chief commercial officer (CCO) of crypto exchange OKX, believe that many of the early users and lenders of Mt. Gox are long-term Bitcoin enthusiasts who are less likely to sell all of their Bitcoin holdings immediately.
Drawing comparisons with previous enforcement-related sales, such as the Silk Road case, Lai points out that they did not result in sustained catastrophes. price drops.
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Experts, including Jacob Joseph, research analyst at CCData, suggest that markets have enough liquidity to absorb any potential mass market sell-off.
Joseph explains that many of the Mt. creditors may choose to receive early repayment by accepting a 10% reduction in their holdings, which would reduce overall selling pressure.
Recent price movements indicate that the temporary impact of Mt. Gox refunds can now be factored into the market, further supporting the view that potential selling pressure could be mitigated.
Various recipients and time element
Alex Thorn, head of research at Galaxy Digital, believes that fewer coins will be distributed than anticipated, resulting in fewer selling pressure than expected.
However, Thorn acknowledges that even if only 10% of the distributed Bitcoin is sold, it could still have an impact on the market. Thorn points out that most individual lenders deposit their coins directly into trading accounts, making them easily sellable.
Vijay Ayyar, head of consumer growth for Asia-Pacific at crypto exchange Gemini, suggests that the overall impact of the Mt. Gox will likely be dissipated due to the diverse recipients of the funds.
Individual holders will receive their Bitcoin immediately, while a significant amount will be disbursed to claims fundswhich will then be distributed to its limited partners. Ayyar mentions that this process can take time, adding a temporal element to the price impact.
Bitcoin Price Predictions for July
As the cryptocurrency market enters the month of July, analysts are offering insights into Bitcoin’s price outlook based on historical trends and technical analysis.
Notably, Ali Martinez suggests that Bitcoin has historically shown a strong recovery in July after a negative performance in June. Martinez highlights that during this month Bitcoin showed an average return of 7.98% and a median return of 9.60%.
![Mt. Gox Bitcoin Dump: How Will $9 Billion Liquidation Affect BTC Price? 1 Bitcoin](https://thegurumedia.com/wp-content/uploads/2024/07/GRToLnUWgAAq5Uk.jpeg)
Martinez also emphasizes that Bitcoin is currently demonstrating robust support at $61,100, which could serve as a crucial level for price stability. On the other hand, the analyst identifies $64,050 and $66,250 as the most important resistance areas.
Breaking these resistance levels is key to Bitcoin’s potential to retest its all-time high of $73,700 in March this year.
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Supporting this view is another technical analyst, Rekt Capital, suggests that Bitcoin is exhibiting favorable price action to form a cluster at the low of $60,600. This clustering effect, according to the analyst, could develop throughout July.
This cluster formation aims to set up for a potential recovery back to the high range of $71,500.
At the time of writing, the largest cryptocurrency on the market trades at $62,630, up 2% in the 24-hour period.
Featured image of DALL-E, chart from TradingView.com