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The value of Bitcoin (BTC) plummeted approximately 7% within a single hour, dropping from $29,850 to $27,789. Media sources indicated that this decline was triggered by blockchain analytics company Arkham Intelligence mistakenly issuing an alert that wallets associated with Mt. Gox and the U.S. government had started transferring significant amounts of Bitcoin.
Arkham initially tweeted to acknowledge that the reported error was due to a “bug fix” that sent out a false notification on their analytics platform to a “small subset of users.” This alert was later shared by the well-known crypto news alert account DB or Tier10k.
[DB] Mt Gox and US Govt Wallets Making Transactions: Arkham Alert
— db (@tier10k) April 26, 2023
However, one hour later, Arkham released a follow-up tweet asserting that it had “conducted an investigation of the DB Alert situation, and determined that the Arkham alerts were sent accurately in this case.”
We have conducted an investigation of the DB Alert situation, and determined that the Arkham alerts were sent accurately in this case.
DB set two alerts on all Bitcoin transactions above $10k USD, with no counterparties set, then named the alerts “Mt Gox” and “US Gov”.
When we… pic.twitter.com/8OITiygNhL— Arkham (@ArkhamIntel) April 26, 2023
“Neither the alert nor the tweet could have caused the sharp BTC price drop today,” stated Arkham, noting that the decline occurred between 19:17 and 20:01 UTC, while the alerts and the subsequent tweet were sent at 20:07 UTC and 20:08 UTC, respectively.
Moreover, data shared by Twitter user IT Tech indicated that there had been no transactions from the wallets linked to Mt. Gox, implying that the sudden Bitcoin crash might have been due to factors unknown to market participants at the time of this report.
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FAKE NEWS about MT Gox wallets making transactions.
No activity there✅ https://t.co/IbZKrK7BJ9 pic.twitter.com/mdOZv4nzI4— IT Tech (@IT_Tech_PL) April 26, 2023
According to information from blockchain explorer Blockchain.com, a Bitcoin address thought to belong to the U.S. government’s wallet for Silk Road hack funds did experience a transaction on April 26. However, it was an inbound transaction valued at only $0.19, which was still being processed at the time of this report.
Related: First Republic Bank dives another 20% with Bitcoin ‘ready for $40K’
Regardless of the cause behind the flash crash, the abrupt and significant price drop caused turmoil in the derivatives market, with the total amount of liquidations for crypto market participants exceeding $211 million at present. Bitcoin traders represented nearly $97 million of these liquidations.
Total volume of cryptocurrency liquidations in the last 24 hours. Source: Coinglass.
At the time of this report, Bitcoin is trading at $28,378, reflecting a 0.25% increase over the last 24 hours according to data from the Cointelegraph Price Index.
Cointelegraph contacted Arkham CEO Miguel Morel for further clarification on the issue but has not yet received a response.
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