Who is selling value coins as the market takes a nosedive

July 5th, Coin World News reported:
Jessy,
On July 5th, the cryptocurrency market experienced a major plunge once again, with Bitcoin falling to around $54,000, and many altcoins even dropping below the lows of the 2022 bear market.
As Bitcoin continues to test new lows, altcoins are facing panic selling. According to CoinGecko data, the global cryptocurrency market capitalization has fallen below $2.1 trillion, with a change of -7.81% in the past 24 hours.
The direct cause of this decline may be the large amount of selling pressure on Bitcoin, while the fundamental reason is the uncertainty in the macroeconomic aspect of interest rate cuts. When will the market turn for the better?
High selling pressure and weakening macro expectations
The cascade of liquidations has begun. Starting from yesterday, the positions of many whales have been liquidated, resulting in a liquidation of approximately $700 million in the past 24 hours. The speed of the decline is rapid and continuously breaking everyone’s bottom line. In fact, from June until now, the major factors affecting the decline of the market have remained largely unchanged, mainly as follows:
1. Mt.Gox begins to repay BTC to some creditors
The incident in Mt.Gox was a buried landmine for more than ten years, and now it has finally exploded.
On May 28th of this year, the bankrupt exchange Mt.Gox began to transfer a total of 141,685 bitcoins from its cold wallet accounts, worth approximately $98 billion at that time, which triggered a panic sell-off in the market. These BTC will be released to creditors between July and October.
On July 5th, Mt.Gox has begun to compensate creditors. Japanese creditor @VoiceOnFate stated today on X that they have received BTC and BCH compensation from Mt.Gox through a designated exchange platform. The compensation represents 13% of the BTC holdings in the account at that time.


On July 5th,
Mt.Gox
‘s transfer records, including transfers to Bitbank exchange.
Mt.Gox had lost approximately 750,000 bitcoins belonging to users, and currently holds 141,686 BTC, accounting for 0.72% of the total circulating supply of Bitcoin. If all these coins are compensated to creditors, it is believed that it will bring significant selling pressure to Bitcoin. Some analysts have pointed out that if these bitcoins are sold off, the price of Bitcoin will drop to around $47,000.
(For more information on the selling pressure caused by Mt.Gox compensation, please refer to “Galaxy Research Director: Mt.Gox’s upcoming BTC compensation, how much selling pressure will it bring?”)
2. Governments such as Germany and the United States selling Bitcoin
The German government holds 45,624 bitcoins, and within less than a week since June 25th, it has transferred over $425 million worth of bitcoins to exchanges.
In addition to the German government, governments of the United States, the United Kingdom, China, Ukraine, and other countries also hold a large amount of bitcoins.
According to on-chain data, the US government also sent 3,940 bitcoins to the Coinbase Prime wallet on June 26th, 2024.
3. Miners selling off
After the halving, miners’ income has plummeted. Due to the worsening income situation, many inefficient miners have been forced to exit the market, resulting in a significant drop in Bitcoin’s computing power. OKLink data shows that in the past two months, Bitcoin’s network-wide computing power has decreased by 15% from its peak, and has been in a continuous decline in the past week.
At the same time as the decline in computing power, the group of miners has also increased their selling pressure recently, becoming one of the largest selling pressures in the market. Currently, miners are more focused on short-term profits. According to IntoTheBlock data, Bitcoin miners have sold over 50,000 bitcoins since 2024, and the Bitcoin reserves held by miners have gradually reached the lowest level ever.
4. Slowdown in institutional buying flow
Currently, market liquidity is insufficient.
The core factor that boosted Bitcoin’s rise this time was undoubtedly the Bitcoin spot ETF. Matrixport once stated that institutional investors including asset management companies, investment advisors, pension funds, and sovereign wealth funds are buying Bitcoin spot ETFs. The rapid influx of institutional funds has led to a surge in demand for Bitcoin and a soaring price.
However, this consensus has been challenged recently. Since June, the funds in the Bitcoin spot ETF have mostly been in a state of large outflows.


5. Weakening macro expectations
At the monetary policy meeting on June 12th, the Federal Reserve kept the target range for the federal funds rate at 5.25% to 5.5%, and according to the published interest rate path dot plot, Fed officials predicted that the median federal funds rate would drop to 5.1% by the end of 2024, meaning that there may only be one interest rate cut this year, which is fewer than the previously predicted two cuts.
Will there be further interest rate cuts within this year? Currently, the possibility of negation seems to be greater.
What about the future market trend?
If the future market trend is to rise, the fundamental factor is definitely the interest rate cut by the Federal Reserve. From the current situation, the market’s rise is mainly driven by information, and the most direct improvement is the influx of macro liquidity.
Another aspect to look forward to is the US presidential election. As the election approaches, the crypto war between Trump and Biden is escalating. And the “crypto industry” has also become a bargaining chip for politicians to win over voters. First, Trump frequently took actions, choosing crypto figures as crypto assistants for his election and publicly supporting the Bitcoin mining conference, and so on. Biden also participated in the Bitcoin roundtable meeting and contacted crypto-related individuals. The game between the two sides undoubtedly favors the crypto industry, as seen from the sudden approval of the Ethereum spot ETF.
In this regard, both the interest rate cut and the US presidential election are long-term positive factors for the crypto industry.
In the short term, the market has already reached a temporary bottom. First, Bitcoin has fallen to the shutdown price of some mining machines, indicating a temporary bottom.
Currently, USDT has a relatively high premium. According to OKX data, the off-exchange price of USDT has risen to 7.38 yuan, while the offshore exchange rate for the US dollar to RMB is 7.29 yuan. Generally, a premium for USDT is caused by a large amount of buying. Currently, many people have a strong sentiment of buying at the bottom.
However, it should be noted that the short-term market trend still has considerable uncertainty. First, it takes time to digest the selling pressure, such as the compensation in Mt.Gox has just begun. The approval of the Ethereum spot ETF has not yet been implemented, and if the subsequent development of the spot ETF falls short of market expectations, it will further cause the market to decline.
However, in the declining market, it may be possible to gradually build positions in some mainstream coins such as Bitcoin and Ethereum with higher certainty.