The crypto market has recently diverged not only from the rapidly improving liquidity conditions in the broader economy but also from various positive crypto-specific factors such as declining exchange balances, regulatory clarity, reduced Bitcoin miners’ reserves, the historically positive post-Halving period, and the imminent launch of Ethereum spot ETFs.

This decoupling has been driven by the German government selling nearly 50,000 bitcoins over the past few weeks, most of which were sold last week, along with the start of repayments to Mt. Gox creditors. The substantial rebound in crypto assets this weekend, as the German Bitcoin selling ended on Friday, highlights that the tumbling prices in recent weeks were merely due to the German government, Mt. Gox, and, not least, the unjustified fear of substantial selling pressure, as we argued in last week’s Crypto Crisp titled ‘Buy the Dip’.

There may still be some panic on the horizon as the Mt. Gox estate continues its Bitcoin payouts to creditors, but it seems we are likely past the worst of these fears. Additionally, the market may have realized that 50,000 bitcoins sold over a few weeks is not as alarming as initially thought – even more than what might be sold by Mt. Gox creditors, even in a worst-case scenario.

We hope you have used the past few weeks to accumulate Bitcoin, Ethereum, and other high-conviction bets. Nonetheless, whales and long-term holders have been accumulating bitcoins, as seen in Chart 2 and Chart 3. We are on the verge of setting new all-time highs in the next few months. If you have not followed our research in recent months, refer to Crypto Moves #33, where we discuss why we are so bullish for the near future.

Please note, there will be no Crypto Moves on Thursday as I am out and about. Instead, Andreas Steno will publish a liquidity update on the crypto market.