As Bitcoin continues its sluggish performance into August, two major factors could intensify the selling pressure on the cryptocurrency in September. With nearly $15 billion worth of Bitcoin potentially hitting the market, the effects on Bitcoin’s price could be substantial.

Upcoming Selling Pressure: What to Expect

The combined influence of Mt. Gox and the US government could bring a wave of selling pressure to Bitcoin, estimated at over $14.8 billion. The US government holds approximately 203,000 Bitcoin, valued at about $12.1 billion, while Mt. Gox, the defunct crypto exchange, is preparing to release an additional 46,000 Bitcoin, worth over $2.7 billion.

Mt. Gox’s Impact on the Market

Mt. Gox, which has been out of operation for several years, is set to distribute $2.7 billion worth of Bitcoin by the end of 2024. The distribution will occur through Kraken, a major cryptocurrency exchange. Despite concerns, a recent report by crypto analytics firm Kaiko suggests that this distribution might not significantly disrupt the market:

“Kraken has managed Bitcoin ETF flows with only minor slippage during the US market close. Given its liquidity profile, any added selling pressure from the Mt. Gox repayments is unlikely to cause significant structural issues in the broader market,” Kaiko noted.

Mt. Gox creditors have been waiting for their funds for a decade. With Bitcoin’s value increasing over 8,500% during this time, many creditors are poised to sell. However, past distributions suggest a more measured approach: creditors who received $4 billion worth of Bitcoin at the end of July did not flood the market with sales.

The US Government’s Bitcoin Holdings

The US government’s Bitcoin holdings, totaling over 203,000 BTC, could also impact the market. If these holdings are sold or auctioned, it could add substantial selling pressure. The impact of these potential sales on Bitcoin’s price remains uncertain, but they could contribute to a bearish trend.

Market Response and Liquidity Concerns

Bitcoin’s price has struggled to stay above the psychological $60,000 mark, currently trading below this level after falling over 10.7% this month. To finish August on a positive note, Bitcoin would need to close the month above $64,300. However, analysts from Bitfinex have cautioned that the lack of liquidity typical of the summer months might extend into September:

“Price trends reflect historical market transactions. Currently, Bitcoin has rallied to the Short Term Holder (STH) realized price of around $63,900, which has led to some profit-taking from this cohort,” the analysts explained.

Additionally, Bitcoin’s historical performance in September has been less than stellar, with an average monthly return of -4.78% since 2013. This seasonal trend, coupled with the anticipated selling pressure from Mt. Gox and the US government, could further dampen Bitcoin’s price movement in the coming month.

Conclusion: Navigating the Uncertain Waters

As Bitcoin faces potential selling pressure from both Mt. Gox and the US government, the market’s response will be crucial in determining the cryptocurrency’s future direction. Investors should remain vigilant and consider the potential impacts of these significant events on Bitcoin’s price.

While past distributions have not always led to major market disruptions, the combined $15 billion worth of Bitcoin entering the market could create volatility. As September approaches, market participants will be watching closely to see how these factors play out and influence Bitcoin’s trajectory.