Is Bitcoin Heading For The Next Black Swan Event Coming Next Month
Bitcoin’s performance since mid-June may have ignited hopes for a big bullish recovery. However, the limited nature of the upside now suggests that something else may be on the way.
Zooming out on the price chart shows that it can form a bearish flag pattern. The likelihood of this outcome is further supported by a potential $3 billion worth of selling pressure waiting to hit the market.
Bitcoin’s previous crash events were underscored by major reversal events. These include the Terra Luna and UST crashes in May, as well as the 3AC debacle in June.
The royal coin experienced a lot of selling pressure in the months leading up to that, due to the SEC’s quantitative easing. The subsequent downside was exacerbated by heavy liquidations for highly leveraged positions.
The next black swan is around the corner?
If Bitcoin’s upside since mid-June is the creation of a bearish flag, the market is due for more downside. It will take a lot of selling pressure to trigger another major downside. It turns out that there is an upcoming event that could lead to approximately $3 billion worth of selling pressure over the next few weeks.
About 137,000 Bitcoin recovered from Mt. Gox is expected to enter the market soon.
Given the long duration and robust growth that has taken place since Mt. Gox hack, it is likely that the recipients will want to sell.
In just a few weeks
137,000 #bitcoin will be returned to Mt. Gox investors.
Initial price per coin: $483
Current price per coin: $24,000 (50x return)
Current total value: $3.3 billionHow many of these original investors sitting on a 50x profit will sell? pic.twitter.com/uWeTFzS9I7
— Colin Talks Crypto – CBBI.info (@ColinTCrypto) 16 August 2022
Such great selling pressure can also trigger a cascading effect of panic selling. Thus causing a significant crash. The actual timeline for the release is still not clear, but the custodian responsible for 137,000 BTC recently received regulatory approval.
A recent cryptoQuant report revealed that a wallet linked to Mt. Gox just moved 300 BTC for the first time in nine years. This has sparked speculation that it is a sign that MT GOX BTC is about to be released. However, no activity has been observed on Mt. Gox balance so far.
Source: Glassnode
In particular, an increase in short position liquidations was observed in the last two days. Thus, it suggests that there are quite a large number of shorts at today’s level.
This is because another black swan event will be a lucrative event for short sellers.
Open interest in futures has also increased despite wobbly between August 23 and 24. This may include futures bets against the upside.
