Markets
Bitcoin Cash Price Under Selling Pressure as Mt. Gox Upends Market By Investing.com
Fears that selling pressure from failed Mt. Gox asset buyouts could push down the price of both appear well-founded, according to a note from Kaixo Research.
In addition to the roughly $9.5 billion in BTC that the former exchange will return to its customers, Mt. Gox will also return 143,000 BCH, worth roughly $73 million. This long-anticipated development has created uncertainty in the market about how many investors will sell their holdings and through which venues.
Kaixo Research reported that selling pressure on BCH accelerated on Binance and OKX ahead of the official announcement, especially at the end of the Asian trading hours on July 4. Several sell orders were executed on Binance around 9:00 UTC as the market awaits the announcement.
The impact on BCH liquidity was evident, as price slippage for a simulated $100,000 sell order reached its highest level in over a month on most exchanges. This indicated deteriorating liquidity due to insufficient order book depth for large market orders. The highest slippage was observed on Itbit and Bybit. On July 5, BCH slippage increased from 0.2% to 2.8% on Bybit and from 0.3% to 3.5% on Itbit.
“The strong selling pressure surrounding the Mt. Gox redemption event has significantly impacted BCH liquidity,” Kaixo Research noted. The liquidity issues reflect the broader market’s reaction to the redemption announcement.
Mt. Gox, once the world’s leading cryptocurrency exchange, which in its early years handled over 70% of all Bitcoin transactions, was forced to declare bankruptcy in 2014 after a hack resulted in the loss of approximately 740,000 Bitcoin.
The refund announcement increased selling pressure on Bitcoin and the cryptocurrency market in general, with Bitcoin plunging to its lowest level in five months. This free fall led to the liquidation of over $580 million in bullish bets.
Exchanges approved by the trustee to process refunds include Bitbank, BitGo, Bitstamp, Kraken, and Japanese exchange SBI VC Trade.