Crypto Market Rebounds, Bitcoin Hits 4-Week High
Bitcoin (BTC) surged above the $65,000 mark for the first time since late June, shrugging off a dip below $63,000 earlier in the day. This surge comes amidst the distribution of assets from the defunct Mt. Gox exchange, which moved $2.8 billion worth of BTC.
The crypto rally was broad-based, with the CoinDesk 20 index (CD20) gaining almost 3% over the past 24 hours. 16 of the 20 constituents were in the green during the day.
XRP Leads the Rally
XRP (XRP), the native token of the XRP Ledger payment network, was the strongest performer among altcoin majors, surging 9% on Tuesday and extending its weekly gains to 35%.
Whales, or large asset holders, are increasing their holdings of XRP, indicating conviction in higher prices, according to crypto data provider Santiment.
CME and CF Benchmarks announced indices and reference rates for XRP, which could enhance institutional adoption of the token, suggested Brad Garlinghouse, CEO of Ripple.
Mt. Gox Sell-Off “Overestimated”
Crypto buyers are considering how much of the $9 billion in bitcoin about to be distributed to Mt. Gox collectors might be dumped on the market.
Ki Young Ju, CEO of crypto analytics firm CryptoQuant, argues that fears over the sell-off are “overestimated” and won’t derail the current rally.
“I believe this distribution will not end the bullish trend, as the funds are expected to react to market sentiment similarly to the prevailing bitcoin supply,” he explained in an X post. “Unlike the German government selling, Mt. Gox collectors are not compelled to sell, so it is not purely sell-side liquidity.”
CoinMetrics also stated that the market should be able to absorb the liquidation of assets from Mt. Gox collectors if it occurs in an orderly manner spread over several weeks, considering Bitcoin’s current market depth and trading volumes.
“The distribution of ~65,000 BTC (priced roughly $1.95B at current prices) could likely be absorbed by the market over a period of a couple of weeks without causing severe disruptions, assuming the liquidations are achieved gradually and across multiple exchanges,” CoinMetrics analysts wrote in a Tuesday report.
“These findings, however, are only suggestive of the depth and maturity of the BTC market, but should assuage fears of liquidity scarcity in the near term.”
