First, the bad news: Bitcoin dumped hard again last night.
Now, the somewhat-good news: Bitcoin recovered most of it this morning on stronger volume than the fall.
A plausible explanation for some of Bitcoin's weakness was presented on Twitter recently by @matt_odell. He correlated these price drops with trustee sales from the Mt Gox liquidation.
First, a quick refresher - Mt Gox, previously known as the "Magic The Gathering Online eXchange" (seriously), was more or less the first major Bitcoin exchange after being converted from an exchange where one could speculate on the future price movements of Magic The Gathering cards. Despite a name that was clearly synonymous with security and a long history of legitimate operations, Mt Gox succumbed to a number of factors, including hacking and poor security operations/commingling of client funds/hot-wallet storage that ultimately led to most users losing most of their deposits.
Well, the liquidation of what Mt Gox assets could be recovered has been ongoing as each new batch of Bitcoin recovered from the exchange has been released to the trustee. Note the timing of the releases (not sales) highlighted in the following chart:
If this is the explanation for some of the recent price weakness, it can only last so long as the market continues to gobble up these "discounted" Bitcoin.
One other quick piece of data that may be bullish comes from... the mainstream.
Per a video from CNBC (once again...seriously) it may "now be time to buy Bitcoin" based on the "Bitcoin Misery Index".
The "Bitcoin Misery Index", not to be confused with the Body Mass Index, is a rating of "how miserably Bitcoin holders are at the current price" from 0 to 100, with 0 being "most miserable/best time to buy."
Here's a charted history of how effective this indicator has been in the past:
According to CNBC, this indicator has not been this bullish since September of 2011! It's far from a guarantee, but perhaps as we put first quarter 2018 into the books, we can hope it will be the worst of the year.
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Sources: Google, Twitter @matt_odell, @Daudimitch, CNBC, Zero Hedge
Copyright: Bitfinex, Cryptowatch, CNBC, TransformingTruth.org, Bitcoin.com
That's what I thought. Those geeks sold some again to hype the price and attract potential buyers. I think they will dump again soon. That's why in every dip, it's good to buy some so that if it goes up, you'll be one of the winners.
interesting, never heard of the bitcoin misery index before!
very interesting post i also wrote a post regarding MTGOX . You ca check it here :https://steemit.com/bitcoin/@sergiudemerji/how-mtgox-did-it-again-aftermath
Good
@lexiconial Do you know the issue of bitcoin creator that case?
If you know, please let us know, thank you very much,
Uh, can you rephrase this question into English?
steady, steemit will soon dominate the world of blockchain
@lexiconical
So in other words, once the liquidation of the Mt. Gox recovered assets are complete, there should be some good price movement. That would be some good news for the long time hodlers.
That is (hopefully) the idea, yes.
I think the CNBC misery index is actually used to measure their management's emotions after they read their weekly ratings report.
Haha, in that case, I'm sure it is going to continue to go down (get worse)!
LOL indeed.
Very amazing
will bitcoin fall @titanik
Thanks for the analysis! Do you think the market has settled down partly because we now know that the Mt GOX dump was part of the reasons for the prices to fall?
The dump had no real fundamental reason and maybe now the market will compensate the overreaction for the earlier dumps.
It's simply a matter of the extra coins getting sold, or the expectation by the market of same.
Hey @lexiconical,
I think that the Mt. Gox sell off can be the reason for a little Price drop of Bitcoin, but I cannot believe that 400$ Million can influence the price of Bitcoin that much if we are talking about a coin which holds a market cap of more than 160$ Billion .. trying to look for some other reason for the drop in the past days, but I wasn't really successful besides the FUD about Binance. Would love to hear some thoughts from you and this great community here ! :)
The legal woes of BCC may factor into this decline. Until the lawsuits are settled, and investors learn how hard the SEC comes down on the exchange, I expect FUD will cause a continued decline in value. Most named in the lawsuits are holding millions in BTC, and most likely will be forced to sell IF served with hefty 'restitution' fines. Of course, this is jmho.
Peace.
Thank you ! You mentioned some interesting points ! :)
✌!
Bought a .25 BTC at $8700 this morning after reading the about the misery index and reading a tweet that the price was below 1 on the Mayermultiple.
Thanks for this! I learned something new. Breaking this apart, I mean really...Would you put your money in an exchange with the word 'magic' (disappearing act)...the Gathering (wasn't this a 2013 horror movie?)...This was cryptic from the word go...lol!
Best regards.
Peace.
Good information for we all in steemit.
Wow Good....
Angry bitcoin traders are railing against bitoin sales by the trustees of funds from collapsed Japanese crypto exchange Mt Gox.Mt Gox was launched in 2010 and was one of the earliest cryptocurrency exchanges. It grew to become the world's biggest exchange but filed for bankruptcy in 2014 after being hit by a $ 450 million hack. Its remaining funds have been placed into a trust to help pay back creditors.Bloomberg reported on Wednesday that Nobuaki Kobayashi, the Tokyo attorney and bankruptcy trustee for Mt Gox's funds, disclosed in a creditor's meeting this week that he sold $ 400 million of Mt Gox's bitcoin since last September. Kobayashi is in charge of liquidating Mt Gox's fund of 166,000 bitcoins as of March 5.Bitcoin investor Alistair Milne subsequently pointed out on Twitter that over half of the bitcoin Kobayashi sold was transferred to an exchange on February 5, the day before bitcoin hit a three-month low of close to $ 6,000. Nice @lexiconical
This is a successful cut and paste of someone else's uncited work.
Thank you sir @lexiconical
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