In a sharp turn of events, the crypto market witnessed a massive sell-off, shedding $70 billion in late trading on April 26. The reason behind this sudden drop was a false alarm triggered by blockchain analytics firm Arkham Intelligence, which tweeted that the US government and Mt. Gox wallets had active transactions. This sent traders into a frenzy, leading to panic selling and the liquidation of over $351 million worth of assets.
However, as the news was later debunked, the market began to recover, bouncing back quickly during the morning Asian trading session on April 27. In just 12 hours, panic selling had caused over $255 million in total liquidations, with BTC prices falling to around $27,690.
Despite this setback, BTC has since recovered almost 5%, reaching over $29,000 again at the time of writing. The panic sale has resulted in BTC liquidations falling to just $22 million over the past four hours.
While today’s sell-off may have been a false alarm, industry observers warn that the US government may still choose to liquidate its Mt. Gox wallet, which could lead to another dip in the crypto market. DeFi analyst Miles Deutscher commented, “The US Gov + Mt. Gox Bitcoin IS going to move. Be prepared for when it does.” He further opined that the US government should accumulate more Bitcoin instead of selling it to acquire USD.
The US Mt. Gox wallet refers to a stash of Bitcoin that was seized by the US government during its investigation into the now-defunct Japanese cryptocurrency exchange, Mt. Gox. Mt. Gox was once the world’s largest Bitcoin exchange, handling over 70% of all Bitcoin transactions in 2013. However, it filed for bankruptcy in 2014 after losing 850,000 BTC, worth around $450 million at the time. The US government seized the Mt. Gox wallet during its investigation into the exchange’s collapse, and it has remained under the government’s control ever since. It is estimated to hold around 141,000 BTC, worth over $4 billion at current prices.
This recent volatility has once again brought attention to the crypto market’s unpredictable nature. While some view it as an opportunity to buy the dip, others are wary of the risks involved. As metaverse and the crypto sector continue to evolve, it is crucial for investors to stay informed and make informed decisions based on accurate information.
The crypto market’s resilience has been put to the test once again, with the false alarm causing a massive panic sell-off. However, the market has bounced back quickly, showing signs of recovery. As the sector continues to grow and evolve, investors must remain vigilant and adapt to the market’s unpredictable nature.