Post-Mt. Gox payouts lead to worst crypto liquidations day since FTX collapse

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Key Takeaways

Mt. Gox’s fund transfer triggered over $1 billion in crypto liquidations, the largest since FTX collapse.
Bitcoin price dropped 6% following the Mt. Gox transfer, despite previous studies suggesting minimal market impact.

The news of Mt. Gox moving Bitcoin (BTC) and Bitcoin Cash (BCH) to a new wallet prompted a 6% on BTC’s price in a few hours. According to TradingView data shared by X user Honeybadger, over $1 billion got liquidated yesterday, making it the day with the most liquidations since the FTX collapse.

Biggest liquidation event since the FTX collapse

yikes pic.twitter.com/sn3tcCMakt

— Honeybadger (@HoneybadgerC) July 5, 2024

Although Bitcoin showed signs of recovery over the day, it is still down 3% in the past 24 hours, priced at $56,486.73. However, a few X users commented on the publication saying that the data shared wasn’t accurate, sharing a chart by Coinglass. Honeybadger then answered that the data used in the comments was yet to be updated, diverging from what he shared.

Despite a study from CoinShares highlighting that the BTC payments to Mt. Gox creditors wouldn’t impact heavily on the market, investors were fearful of the dip and sold their holdings, resulting in the current pullback in prices.

Additionally, the recent speech from Jerome Powell at Sintra reinforced the Fed’s cautious stance towards inflation, adding to the pressure. According to Ben Kurland, CEO of DYOR, Bitcoin and the whole crypto market might trade sideways until the next Fed meeting, set to happen on July 31st.

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