Is the BTC Bull Market Still Intact?
Key takeaway:
Judging by the current events and data, the BTC bull market remains intact. The recent volatility is primarily due to a supply shock and does not reflect a fundamental change in market sentiment. The strong buy volumes, lack of panic selling, and coordinated efforts to stabilize the price all point to continued confidence in Bitcoin's long-term value.
Mt. Gox's BTC Release and Exchange Activities
In May 2024, Mt. Gox made headlines by moving 147K BTC worth approximately $9.7 billion to a new wallet. This transfer was part of the preparation to repay creditors who have been waiting since the exchange collapsed in 2014. The repayment process was set to begin in early July 2024, causing significant concern over potential selling pressure.
The market reacted to the Mt. Gox announcement with noticeable inflows
https://ibb.co/NSTxJgp
Binance’s Market Activity
A closer examination of Binance's activities suggests a strategic accumulation of Bitcoin:
Other Major Exchanges
The market's reaction to the Mt. Gox news is mixed. There was an initial dip in Bitcoin's price due to the anticipated increase in supply, but some analysts remain bullish. Predictions of Bitcoin reaching $150,000 post-distribution suggest that long-term sentiment might still be positive
https://www.kitco.com/news/article/2024-07-03/bitcoin-tests-60k-mt-gox-fears-analysts-see-rally-150k-after-distribution
Binance appears to have played a critical role in absorbing much of the Bitcoin sold on the market, potentially using derivatives to keep prices favorable for accumulation. Other exchanges like Coinbase, Kraken, and Bitflyer were primary venues for selling, while Bybit also increased its holdings.
A closer look at order book shows the trading activity (Binance & OKX ps: other exchanges had insignificant order volume) displays a pattern of frequent and significant trades aimed at keeping the Bitcoin price within a very narrow range, specifically between $55,500 and $56,800.
Judging by the current events, this price movement is primarily due to a supply shock and does not reflect normal market behavior. The lack of significant spot sell orders and the substantial buy volumes at key price levels suggest a high probability of recovery.
The market has shown resilience, with significant buy orders absorbing the sell pressures, particularly clustering at $55,000, $51,000, and $48,000. This behavior indicates strong market support and potential for price recovery after the supply shock stabilizes.
Judging by the current events and data, the BTC bull market remains intact. The recent volatility is primarily due to a supply shock and does not reflect a fundamental change in market sentiment. The strong buy volumes, lack of panic selling, and coordinated efforts to stabilize the price all point to continued confidence in Bitcoin's long-term value.
Mt. Gox's BTC Release and Exchange Activities
In May 2024, Mt. Gox made headlines by moving 147K BTC worth approximately $9.7 billion to a new wallet. This transfer was part of the preparation to repay creditors who have been waiting since the exchange collapsed in 2014. The repayment process was set to begin in early July 2024, causing significant concern over potential selling pressure.
The market reacted to the Mt. Gox announcement with noticeable inflows
https://ibb.co/NSTxJgp
- The chart provided shows a significant spike in exchange inflows on May 28, 2024, suggesting that holders might have been preparing to sell their assets in anticipation of price volatility.
- Coinciding with these events, major Bitcoin ETFs, including BlackRock’s Bitcoin ETF, recorded substantial outflows. On May 2024, BlackRock’s ETF experienced a record outflow of $563.7 million. Other ETFs, like Fidelity’s Wise Origin Bitcoin Fund, also saw significant outflows during this period, reflecting investor anxiety and a potential move to liquidate positions ahead of the expected market shock.
Binance’s Market Activity
A closer examination of Binance's activities suggests a strategic accumulation of Bitcoin:
- Binance can use derivatives to artificially suppress the price of Bitcoin. By keeping the price low, Binance could accumulate Bitcoin at more favorable rates.
- Data shows that Binance's Bitcoin holdings have been increasing during this period, indicating that it was a net buyer while other exchanges were experiencing outflows. This suggests that Binance was strategically buying Bitcoin being sold on the market, including those from the Mt. Gox distribution.
- Binance is not only one of the largest holders of Bitcoin but also dominates the market in trading volume. A closer look at order books reveals patterns of coordinated behavior with OKX, indicating potential collaboration to influence Bitcoin's real price.
Other Major Exchanges
- Coinbase, Kraken, and Bitflyer: These exchanges saw significant Bitcoin outflows, indicating that much of the Bitcoin released into the market was sold via these platforms without any significant increase in their net holdings.
- Bybit: Following Binance, Bybit was also a significant buyer, with its Bitcoin holdings increasing over the same period. This aligns with the observed pattern of accumulation among certain exchanges while others saw declines in their reserves
The market's reaction to the Mt. Gox news is mixed. There was an initial dip in Bitcoin's price due to the anticipated increase in supply, but some analysts remain bullish. Predictions of Bitcoin reaching $150,000 post-distribution suggest that long-term sentiment might still be positive
https://www.kitco.com/news/article/2024-07-03/bitcoin-tests-60k-mt-gox-fears-analysts-see-rally-150k-after-distribution
Binance appears to have played a critical role in absorbing much of the Bitcoin sold on the market, potentially using derivatives to keep prices favorable for accumulation. Other exchanges like Coinbase, Kraken, and Bitflyer were primary venues for selling, while Bybit also increased its holdings.
A closer look at order book shows the trading activity (Binance & OKX ps: other exchanges had insignificant order volume) displays a pattern of frequent and significant trades aimed at keeping the Bitcoin price within a very narrow range, specifically between $55,500 and $56,800.
- So the recent Bitcoin price movements appear to be primarily driven by a supply shock rather than reflecting normal market behavior where spot and derivative trading follow usual buy and sell dynamics.
- Before the sell-offs, there were booked sell orders in the $66,000 to $72,000 spot sell range, and even today, the amount of these orders has not decreased. This indicates there wasn't strong panic selling
- Most of the sell pressure was due to derivatives, with short sellers, shorting Bitcoin in anticipation of the supply shock. This does not reflect the real Bitcoin price.
- Despite the sell pressure, the buy volume has been substantial, with buy orders clustering at $55,000, $51,000, and $48,000 days before the sell pressure increased.
Judging by the current events, this price movement is primarily due to a supply shock and does not reflect normal market behavior. The lack of significant spot sell orders and the substantial buy volumes at key price levels suggest a high probability of recovery.
The market has shown resilience, with significant buy orders absorbing the sell pressures, particularly clustering at $55,000, $51,000, and $48,000. This behavior indicates strong market support and potential for price recovery after the supply shock stabilizes.
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