Crypto Bulls Rack up $580M Liquidations as Bitcoin Drops 8%, Ether, Solana, Dogecoin Plunge

Traders previously warned of a bearish market reaction to Mt. Gox’s bitcoin repayments.

Cryptocurrency prices fell sharply on Friday after movements from a Mt. Gox-linked wallet sparked selling early in Asian hours, leading to more than $580 million in liquidations across major exchanges.

Bitcoin dropped 8% to briefly trade below $54,000, before recovering slightly in a move that erased all gains since February. Ether fell more than 10%, Solana’s SOL and Cardano’s ADA fell 8%, while dogecoin (DOGE) dove nearly 18%.

The selling pressure was triggered by movements from a wallet linked to bankrupt exchange Mt. Gox, several traders told Blockworks. The wallet, which received 140,000 BTC from Binance on Wednesday, moved 10,000 BTC to another unknown wallet on Friday morning.

The transfer, which occurred around 6:30 am ET, coincided with a sharp drop in prices across the board. Bitcoin fell more than $5,000 in a matter of minutes, while ether dropped below $4,000.

However, prices quickly recovered some of the lost ground, with bitcoin trading around $55,000 and ether changing hands at $4,100 at the time of writing.

The selling pressure also led to a large number of liquidations on major crypto exchanges, with more than $580 million in longs, or bets on higher prices, being liquidated, according to data from Coinalyze.

Of the total liquidations, more than $380 million were on bitcoin and ether. The largest single liquidation order was on Binance—an ETH trade valued at $18.4 million.

Meanwhile, open interest—or the number of unsettled futures bets—fell 12%, indicating money was leaving the market.

Cryptocurrency exchange FTX saw the highest total liquidations at $243.5 million, followed by Binance at $188.1 million. Deribit, Bybit and OKX recorded total liquidations to the tune of $63.3 million, $37.8 million and $20.1 million, respectively.

Mt. Gox is preparing for creditor repayments

The movements from the Mt. Gox-linked wallet come as the defunct exchange is preparing for creditor repayments.

Mt. Gox is scheduled to start distributing assets stolen from clients in a 2014 hack this month after years of postponed deadlines. The repayments will be made in bitcoin and bitcoin cash, and could possibly add selling pressure to both markets, as previously reported.

Trading firm QCP Capital said in a Thursday broadcast on Telegram that they expect a dim market in the next few months.

“We anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release,” the firm said in the broadcast, adding that they expect a "chain reaction of selling pressure" from the creditors.

However, the firm also noted that the total supply of bitcoin available for trading is likely to decrease substantially due to the creditor withdrawals, which could lead to "sizable upside" in the second half of 2024.

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