The crypto rebound from last week’s low showed no signs of stopping with bitcoin (BTC) hitting its highest price in four weeks on Tuesday.
BTC surged above the $65,000 level for the first time since late June, shrugging off a dip below $63,000 earlier in the day as wallets related to the defunct Mt. Gox exchange’s estate moved $2.8 billion worth of BTC, likely preparing to distribute assets to creditors in the coming days.
The crypto rally was broad-based, showcased by the market benchmark CoinDesk 20 index (CD20) gaining nearly 3% over the past 24 hours with 16 of the 20 constituents in the green during the day.
The strongest performer among altcoin majors was XRP (XRP), the native token of the XRP Ledger payment network, up 9% during Tuesday and extending its weekly gains to 35%.
The token’s rally is supported by whales, or large asset holders, increasing their holdings, in a sign conviction in higher prices, crypto data provider Santiment pointed out.
Another catalyst was traditional derivatives trading powerhouses CME and CF Benchmarks announcing indices and reference rates for XRP. These offerings may boost institutional adoption for XRP, Brad Garlinghouse, the CEO of closely related blockchain payments firm Ripple, suggested.
Mt. Gox sell pressure “overestimated”
As Germany’s BTC sales are behind, crypto investors mull how much of the $9 billion bitcoin about to be distributed to creditors will be dumped on the market to capitalize on the asset’s appreciation after ten years of waiting.
Ki Young Ju, CEO of crypto analytics firm CryptoQuant, argued that fears over the sell pressure is “overestimated” and will not derail the crypto rally underway.
“I believe this distribution won’t end the bullish trend, as the coins are expected to react to market sentiment similarly to the existing bitcoin supply,” he explained in an X post. “Unlike the German government selling, Mt. Gox creditors aren’t forced to sell, so it’s not purely sell-side liquidity.”
Well-followed crypto and macro analyst Alex Krüger estimated a 10% price drop at maximum for bitcoin if creditors dump their reclaimed assets en masse, Ju pointed out.
CoinMetrics also said that the market should absorb Mt. Gox creditors liquidating their assets if they happen orderly and spread through weeks based on bitcoin’s current market depth and trading volumes.
“The distribution of ~65,000 BTC (worth approximately $1.95B at current prices) could potentially be absorbed by the market over a period of a couple weeks without causing severe disruptions, assuming the liquidations are done 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 shortage in the near-term.”