The cryptocurrency market was in the midst of an apparent bearish sentiment on April 26 as Bitcoin experienced a sharp drop of approximately 7% within a single hour.
Media reports attributed this sudden decline to a false alert issued by blockchain analytics company, Arkham Intelligence. The firm reportedly sent out a notice to a “small subset of users” stating that wallets linked to the U.S. government and Mt. Gox had initiated the transfer of large sums of Bitcoin. The alert was then picked up by the prominent crypto news alert account DB or Tier10k who shared the news with a wider audience, leading to the panic sell-off.
However, the firm denied the reports that its mistake, which occurred as a result of “bug fix,” catalyzed a sell-off that has exacerbated the drop and sparked endless discussion on the root cause of this recent reversal.
An hour after acknowledging the mistake, Arkham posted a follow-up tweet stating that an internal probe concluded that their alerts had been accurate in this particular case. Specifically, the firm said that DB set two alerts on all Bitcoin transactions above $10k USD, with no specific counterparties, naming the alerts “Mt. Gox” and “US Gov.”
Arkham further explains that after they fixed the bug that was preventing alerts from being sent out, he began receiving many alerts based on their parameters. In other words, no one had received inaccurate alerts, but rather began receiving the alerts they had previously set up late on Wednesday.
But more importantly, the company claims that neither the alert nor the subsequent tweet can be attributed to the recent drop, which occurred between 19:17 and 20:01 UTC, while the alert and tweet were sent after at 20:07 UTC and 20:08 UTC, respectively.
Furthermore, Twitter user IT Tech recently published data indicating that there have been no transfers from the wallets linked to Mt. Gox.
Although bull runs in the cryptocurrency market are usually met with excitement and optimism, they are often not analyzed in great detail. Many investors are content to watch their assets increase in value without delving into the reasons behind the upward trend. However, when prices start to fall, the crypto community tends to scrutinize the situation closely, sometimes leading to misinterpretation.
The latest case of mistaken identity in the crypto world is the sell-off of Mt. Gox assets, which is being erroneously blamed for the recent sharp decline in the value of Bitcoin.
Almost a decade after an attack forced the platform to shut down, Mt. Gox creditors were given the option to choose between bitcoin, cash or Bitcoin Cash to receive repayment. The process could make the frozen crypto assets liquid again, depending on the entitled users’ choices.
Those who chose to receive their repayment in bitcoin are reportedly posing a new selling threat to an already battered market. Even those who opt to get paid in fiat money are risking pressuring the market further as the trustee would supposedly liquidate an equivalent amount of bitcoin to pay out those interested in receiving cash.
