On April 26, more than $200 million was liquidated in less than an hour. The move sent Bitcoin prices crashing 8% in a fall to around $27,200.
Around 90% of the liquidations were long positions, according to CryptoPotato. The entire crypto market took a beating, with around $70 billion exiting as total capitalization fell to $1.20 trillion.
However, the asset rapidly recovered during the Asian trading session on Thursday, April 27. BTC had regained 5% since its intraday low to trade at around $29,000 at the time of writing.
The panic selling was caused by fake alerts from blockchain analytics firm Arkham Intelligence, which tweeted that Bitcoin wallets linked to the U.S. government and seizures from the Mt. Gox hack had been revived.
The alerts spread across crypto Twitter with high-profile accounts posting: “Mt. Gox and US Govt Wallets Making Transactions.”
“Bitcoin has plunged -9%, just minutes after Mt. Gox wallets went active for the first time in 7 years,” posted the WhaleWire account to its 500,000 followers.
However, the news turned out to be a false alarm, as Arkham and other crypto traders confirmed.
Furthermore, it was pointed out that these wallets controlled by the U.S. government will eventually become active, potentially liquidating the assets.
At the time of writing, the majority of crypto assets were rebounding. More than $50 billion had returned to the markets pushing the total cap back to $1.25 trillion.
However, markets remain range-bound since their fall from 2023 highs of $1.34 trillion on April 16.
Today’s dump and pump was just a blip, but it clearly shows the impact fake news or alerts on social media can have on crypto markets.