Following a brief decline this week, Bitcoin (BTC) price is attempting comeback only to fail. Although the rest of the crypto market has not reacted as strongly as expected to the little rise in BTC price, the mood of the general ecosystem is significantly lighter than it was only a week ago.
Over the last two weeks, Bitcoin sent a wave of liquidations rolling through the market when it crashed heavily from the $27,800 zone to the $26,400 and then the $25,000 zone.
Hundreds of millions of dollars in trades from both bull and bear trades were obliterated along the way, and people are starting to ask questions.
There were some rumours about the cryptocurrency's collapse being caused by cryptocurrency wallets linked to Mt. Gox and the US government.
However, the question is: Are these rumours true?
There was a lot of speculation this week, about the massive sell-off that knocked Bitcoin's price down from the $30,000 zone.
Many have speculated that this price decline was driven on by the now-defunct cryptocurrency exchange Mt. Gox shifting its reserves, and the US government selling some of the Bitcoin confiscated in its criminal investigations.
As it turns out, the whole rumour began after Twitter user DB retweeted an alert from blockchain analytics company Arkham, which stated that the wallets connected to Mt. Gox and the US government were transferring enormous quantities of crypto.
The platform initially claimed that the notifications went out incorrectly following a "bug fix," only to then retract that claim and add that DB had "configured the alerts incorrectly" and only a "small subset of users" received it.
Data shared on Twitter by IT Tech shows that there have actually been no transactions from Mt. Gox-related wallets, which raises the possibility that Bitcoin's flash meltdown happened for reasons that are now unknown to market players.
Julio Moreno, the head of research at the on-chain analytics company CryptoQuant, also said that as far as CryptoQuant knows, neither Mt. Gox nor the US Government had transferred any tokens as the reports mentioned.
He went further to share the charts and links that would allow users to independently verify this information.
In the comments following Arkham's tweet, Twitter users were quick to point out that the analytics platform's tweet came right before the dump.
One of these is a tweet from @ragneox, with a chart that shows Arkham's tweet coming out right before Bitcoin sank by 7% in less than 24 hours.
Another Twitter user @melardev, however, pointed out that equities, SPX500 and other stocks were also dumped, meaning that Arkham's "influence" may have not been a factor in Bitcoin's dump.
This is without mentioning that the impact on the market might not be as severe if Mt. Gox had actually begun paying the creditors immediately and in large quantities, and the US government simultaneously started selling off its stash of seized Bitcoin.
A report shared by crypto services provider Matrixport on its Telegram channel on April 27 also pointed out that 850,000 Bitcoin were stolen during the Mt Gox hacks, valued at $500 million at the time and currently at $17.8 billion.
And out of this stash, only 200,000 BTC has since been recovered. And since not all of the stolen BTC could be recovered, only a fraction of the original amount held by creditors can be compensated.
Regardless of what caused Bitcoin's crash, however, the resulting chaos has caused a stir in the derivatives market, the last few days have resulted in more than $300 million in trade liquidations, with Bitcoin traders carrying the bulk of these trading woes.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.