“Bitcoin Market Depth Restores to Pre-FTX Crash Levels! Research Firm: Capable of Absorbing Massive Mt.Gox Sell-Off”

"Bitcoin Market Depth Restores to Pre-FTX Crash Levels! Research Firm: Capable of Absorbing Massive Mt.Gox Sell-Off"

"Bitcoin Market Depth Restores to Pre-FTX Crash Levels! Research Firm: Capable of Absorbing Massive Mt.Gox Sell-Off"

According to a previous report by Zombit, the on-chain addresses marked as Mt.Gox transferred a large amount of Bitcoin at the end of May. The official confirmation came later in an open letter, stating that these on-chain transactions were preparing for the repayment of creditors on October 31. As Mt.Gox is expected to distribute 142,000 Bitcoins (BTC) to creditors, with a total value exceeding 9 billion US dollars, the ability of the market to absorb large orders will be a major test if creditors choose to sell their Bitcoins.

However, Kaiko Research, a cryptocurrency market research company, shared some good news in its latest report. The report indicates that the market depth of BTC and BCH has increased by about 30%, reaching the level before the FTX collapse. If a sell-off occurs in the short term, the current market depth may help mitigate potential price fluctuations.

Nevertheless, Kaiko emphasizes that there is a significant difference in the available liquidity between the Bitcoin and Bitcoin Cash markets. The liquidity of Bitcoin Cash is noticeably lower than Bitcoin, with a daily average depth of only 9 million US dollars, which is only 3.5% of the depth of Bitcoin. Currently, the buying depth of BCH is only 4.8 million US dollars, which means that an equivalent-sized sell order could cause a 1% drop in BCH price. The market depth of BCH is far lower than the levels seen in September 2021 when prices were similar. In other words, if creditors sell their assets, the repayment by Mt. Gox could have a significant impact on BCH.