Mt. Gox Terror Strikes Markets, Bitcoin Faces Second-Largest Long Liquidation in History After FTX Collapse, What’s Next?

Ever since Mt. Gox released its rehabilitation plan to repay the creditors who lost their BTC in a hack that occurred in 2013, the markets have become extremely furious. As Bitcoin price continued to rise, the fear of selling pressure began to hit the highs. As a result, the market participants seem to have closed their positions and liquidated out of fear, which has caused mass devastation in Satoshi’s street. The bitcoin price reached levels not seen since March 2024, while bulls do not appear to be in the mood to retain support. Hence, continued bloodshed may be expected in the next few days. 

In a recent update, Mt. Gox has reportedly been transferring huge amounts of BTC to new addresses, internal addresses, and Bitbank from their cold wallets, which has fueled extreme fear in the markets. 

The current market dynamics suggest market participants are in extreme fear. The data from Santiment suggests the markets are recording historic levels of FUD as the traders are constantly mentioning ‘ sell’ more than ‘buy’ across the crypto forums. Moreover, the volume among the top 7 BTC ETFs, including GBTC, IBIT, FBTC, ARKB, BTCO, BITB, & HODL, dried up in early July. The prevailing negative sentiments and drop in the ETF volume may have compelled the longs to get liquidated, which recorded the highest levels since the FTX collapse. 

A well-known on-chain data provider platform, WhaleWire, confirms the second-largest liquidation in Bitcoin history after November 2022. Besides, Germany’s rounds of selling $3.5 billion worth of seized BTC have also contributed to the downfall, along with Mt. Gox. Has the 2022 bear market been revoked? Will the BTC price lose all the profits gained since Q4 2023?

Now that the markets have fallen into deep trouble, traders may look out for another bear market to begin, as it happened in May 2021. However, a popular analyst, Altcoin Sherpa, continues to have some hope over the BTC price rally. The analysts do not see a similar price action as it occurred in 2021. However, he believes that the Bitcoin price may continue to plunge until it hits $50,000 and expects the bulls to halt the bearish trend, initiating a recovery.