Mt. Gox Bitcoin Distribution Impact on Market and Critical Support Zones for Bitcoin
After a decade-long wait, creditors of the now-defunct Mt. Gox Bitcoin exchange have finally begun receiving their owed Bitcoin (BTC) and Bitcoin cash (BCH) via the Kraken and Bitstamp crypto exchanges. This long-awaited distribution had a significant impact on the cryptocurrency market, contributing to a nearly 4% drop in the price of Bitcoin after users confirmed the deposits to their wallets from the exchanges.
On an early Tuesday morning, wallet addresses linked to Mt. Gox initiated the transfer of $2.85 billion worth of BTC. According to on-chain data from blockchain analytics platform Arkham, Mt. Gox executed the movement of $2.85 billion in BTC to new wallets with the primary purpose of distributing 5,110 BTC, equivalent to $340.1 million, to four distinct Bitstamp addresses.
Bitstamp is one of the five exchanges that collaborate with the Mt. Gox Trustee to facilitate the return of funds to the exchange’s creditors, including Kraken and Japanese exchanges Bitbank and SBI VC Trade. Notably, Mt. Gox still retains possession of 85,234 BTC, valued at approximately $5.70 billion.
While some users within the Reddit community have confirmed the receipt of Bitcoin returned by Mt. Gox through Kraken, Bitstamp users have reported not yet receiving their allocations.
Kraken had previously announced the successful reception of creditor funds from the Mt. Gox trustee amounting to over $3 billion or 48,641 BTC, estimating a timeframe of 7-14 days for the complete deposit of funds into user accounts.
In the aftermath of the Mt. Gox payouts, market data analysis platform CryptoQuant has spotted the price correction that BTC has experienced over the past few hours, impacting the line of 1-3 month BTC holders. CryptoQuant emphasizes the importance of monitoring support levels, specifically highlighting the $63,600 area, representing the average purchase price of 3-6 month bitcoin holders.
Crypto analyst Caleb Franzen has observed Bitcoin returning to a familiar support zone, which has proven effective. Despite the temporary setback, Franzen contends that Bitcoin has displayed a pattern of higher highs and higher lows in the short term, indicating resilience amidst the current price volatility.
Further insights provided by analyst Ali Martinez point to a potential double-bottom pattern with bullish relative strength index (RSI) divergence on lower time frames for Bitcoin. If confirmed, Bitcoin could see a rebound to $67,600, contingent upon the critical support level at $66,000 holding firm.
Delving into on-chain data, Martinez underscores a crucial support zone for Bitcoin between $63,440 and $65,470, where approximately 1.89 million addresses collectively purchased 1.23 million BTC, highlighting the significance of this zone as a key area to monitor in the coming days.