Mt.Gox is selling – the crash is coming! You heard this before and sold it all, right?
The phrase “Mt. Gox selling Bitcoin” has become a recurring headline in the cryptocurrency world, often sparking fear and uncertainty among traders. However, history shows that these fears, while initially alarming, tend to have little long-term impact on Bitcoin’s market.
In this article, we’ll explore several examples where the fear of Mt. Gox selling Bitcoin has gripped the market, only for the market to move on as if nothing happened. We’ll also discuss how understanding Bitcoin’s price cycles and using technical analysis tools like the Weekly DSS (Double Smoothed Stochastic) indicator can provide insight into these recurring events.
Let’s dive deeper!
Source: https://x.com/CryptoCon_/status/1722723269051048370
October 2018: Panic Ensues, But Stability Follows
In October 2018, news broke that the Mt. Gox trustee had sold 24,658 BTC, leading to widespread panic. Bitcoin’s price dropped from $6,000 in November 2018 to $3,000 by December of the same year. The market feared a catastrophic crash as a result of this large-scale sale. However, over time, Bitcoin’s price stabilized, proving that the panic was short-lived. Unfortunately, most of the investors started selling massively.
Source: https://www.tradingview.com/x/OhGJrnI9/
What We Learned:
- Immediate Reaction: The market dropped because people were scared of too much Bitcoin being sold at once.
- Long-Term Result: The market calmed down, proving that the fear was overblown.
February 2019: More Fears, But No Big Crash
The Mt. Gox story was in the news again in February 2019. This time, with the approval of a Civil Rehabilitation Plan – plan to repay creditors (people who were owed money) – sparking rumors of another massive Bitcoin dump. Despite these fears, Bitcoin’s price remained steady between $3,400 and $4,000, showing little reaction to the news. This was another example where the market didn’t react as people expected.
Source: https://www.tradingview.com/x/ODZ8aooS/
What We Learned:
- Market Reaction: Minimal impact on Bitcoin’s price despite widespread fears.
- Lesson: The market is stronger than many think when it comes to Mt. Gox news.
July 2021: Rumors vs. Reality
July 2021 was a volatile time for Bitcoin, with prices dropping to $30,000 due to various factors, including China’s crypto crackdown and Elon Musk’s tweets. When news about Mt. Gox repayments surfaced again, the fear returned. However, Bitcoin quickly recovered and by November 2021, it hit a new all-time high of $69,000. The market once again ignored the Mt. Gox story and focused on more solid trends instead.
Source: https://www.tradingview.com/x/f1Lq6IV7/
What We Learned:
- Short-Term Volatility: The price fell, but this was due to many external factors, not just Mt. Gox.
- Long-Term Trend: Strong recovery of Bitcoin and new all-time highs.
August 2022 and July 2024: Fears Keep Coming, But the Market Remains Strong
The years 2022 and 2024 saw the Mt. Gox story came up again, with headlines warning of potential market crashes due to upcoming Bitcoin sales. Both times, Bitcoin experienced some short-term drops, but the market quickly bounced back. For instance, in July 2024, Bitcoin briefly fell from $63,000 to $54,500 following news of Mt. Gox repayments but within 2 weeks the price stabilized, trading steadily around $63,000.
Source: https://www.tradingview.com/x/HwPocgXk/
Source: https://nydig.com/research/estimating-the-price-impact-from-large-sellers
Source: https://www.tradingview.com/x/Op3KDnXc/
What We Learned:
- Consistent Pattern: Short-term volatility followed by market recovery.
- Market Resilience: Bitcoin’s price cycles and overall market forces are more powerfull than any single event like Mt. Gox.
Understanding Bitcoin’s Market Cycles
So why does the market keep moving on? The answer lies in understanding Bitcoin’s market cycles. Bitcoin’s price goes through predictable phases: accumulation (where people buy), uptrend (prices rise), distribution (people sell), and downtrend (prices drop). These cycles are driven by events like the 4-Year Cycle or 26W Weekly Cycle. This bigger picture is what really matters to the market, not short-term news like Mt. Gox repayments.
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Source: https://calebandbrown.com/blog/bitcoins-market-cycle/
How to understand Cycles: Using the Weekly DSS Indicator
The Weekly DSS (Double Smoothed Stochastic) indicator is a powerful tool that helps traders to identify the long-term trends in Bitcoin’s price. It smooths out the noise and focuses on what really matters. For instance, in 2021, the DSS gained momentum right before Bitcoin recovered and hit new highs, showing the importance of focusing on long-term trends rather than short-term fears.
Source: https://www.tradingview.com/x/PYJvt36m/
Conclusion: What Mt. Gox Teaches Us
The repeated story of “Mt. Gox selling Bitcoin” may cause short-term worry in the market, but the long-term impact is minimal. Understanding Bitcoin’s market cycles and using tools like the Weekly DSS indicator can help traders navigate these temporary fears and focus on the bigger picture. The lesson is clear: Mt. Gox is not the end—it’s just noise in the larger cycle of Bitcoin.
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