The cryptocurrency’s recovery from last week’s lows shows no signs of stopping, with Bitcoin {{BTC}} hitting a four-week high on Tuesday.
BTC rose above $65,000 for the first time since late June after falling below $63,000 earlier in the day. Wallets holdings of the shuttered Mt. Gox exchange moved $2.8 billion worth of BTC as it prepares to distribute the assets to creditors in the coming days.
The cryptocurrency rally was broad-based and was showcased with the market index CoinDesk 20 index (CD20) gaining around 3% in the past 24 hours, with 16 out of the 20 components in the green zone on the day.
The strongest performer among the altcoin majors was XRP {{XRP}}, the native token of the XRP Ledger payment network, which rose 9% on Tuesday and extended its weekly gains to 35%.
Crypto data provider Santiment noted that the token’s rise was fueled by whales or large asset holders increasing their holdings, a sign of belief in higher prices.
Another catalyst was the announcement of indices and reference rates for XRP by traditional derivatives trading powerhouses CME and CF Benchmarks. Brad Garlinghouse, CEO of closely related blockchain payments firm Ripple, suggested that these offerings could boost institutional adoption for XRP.
Mt. Gox’s selling pressure is ‘overrated’
As BTC sales in Germany slow, crypto investors are wondering how much of the $9 billion worth of Bitcoin that will be distributed to creditors will be released to capitalize on the asset’s appreciation after a decade of waiting.
Ki Young Ju, CEO of cryptocurrency analytics firm CryptoQuant, argued that fears about selling pressure are “overblown” and will not derail the ongoing cryptocurrency rally.
“I believe this distribution will not end the bullish trend, as coins are expected to react to market sentiment similarly to the current supply of bitcoin,” he explained in an X post. “Unlike the German government sale, Mt. Gox creditors were not forced to sell, so it’s not pure sell-side liquidity.”
Ju noted that prominent crypto and macro analyst Alex Krüger has estimated that Bitcoin’s price could drop by a maximum of 10 percent if creditors sell off the assets they have reclaimed en masse.
CoinMetrics also said that based on Bitcoin’s current market depth and trading volumes, the market should absorb the liquidation of Mt. Gox creditors’ assets if it happens in an orderly manner and spread over weeks.
“The distribution of ~65,000 BTC (worth around $1.95 billion at current prices) could be absorbed by the market over a period of weeks without causing significant disruption, assuming liquidations are done gradually and across multiple exchanges,” CoinMetrics analysts wrote in a report published on Tuesday.
“These findings, however, only provide a glimpse into the depth and maturity of the BTC market; they should allay fears of liquidity crunch in the near term.”