Cryptocurrency exchange Kraken has announced that it has completed the distribution of bitcoin (BTC) to creditors of the defunct Japanese platform Mt. Gox who had chosen the exchange to receive the funds.
These refunds are causing concern among investors that those who receive them may sell their assets en masse and cause a drastic decrease in the price of the currency.
The BTC price fell below the $64,000 line over the past 24 hours, fueling suspicions of a possible sell-off by beneficiaries of the refunds.
BTC price over the past 7 days. Source:CoinGecko .
But Ki Young Ju, founder and CEO of on-chain metrics platform CryptoQuant, noted that Mt. Gox creditors aren’t selling their BTC, in general . He noted:
“Any price drop is likely due to market sentiment, not Mt. Gox selling.”
Ki Young Ju, the founder and CEO of CryptoQuant.
To support his claim, he shared a chart showing that BTC trading volumes and exchange flows remained at “normal” levels on Kraken in the hours after the return of assets to Mt. Gox creditors was completed.
The chart shows that there were no major movements following the returns from Mt. Gox. Source: CryptoQuant.
It is important to clarify that, if there were massive sales, due to the law of supply and demand, this would cause downward pressure on the BTC price.
However, if the majority decides to hold these assets, the impact on the price would not be so significant.
Why is the price of bitcoin falling?
If the returns of BTC from Mt. Gox are not causing downward pressure on the price of this asset, it is worth asking what is happening.
Regarding market sentiment mentioned by Young Ju, it is noted that “the Coinbase Premium Bitcoin Index has turned negative, indicating a decrease in demand from US investors.”
This index is used to understand the buying and selling behaviors of BTC and cryptocurrency investors on the Coinbase and Binance exchanges.
Green bars reflect BTC buying pressure. Source: CryptoQuant.
As seen in the following chart, the drop in the price of BTC coincides with negative values, indicating that there is less demand.
