Bitcoin Takes a Roller Coaster Ride Amid False Alarm of Large BTC Transfers

In the past 12 hours, Bitcoin (BTC) has experienced significant volatility due to a series of rumors hitting the crypto market.

On the morning of April 27, 2023, many crypto investors woke up to see Bitcoin's price plummet and then skyrocket, with fluctuations reaching up to ±$3,000.

The turmoil began on the evening of April 26, when the world's largest cryptocurrency surged from $28,900 to $30,000. This sharp rebound was seen as Bitcoin's recovery from a sudden dump on April 22, when it had dropped to $27,125, erasing nearly all gains made that month.

The situation took a turn at 01:58 AM (Vietnam Time) when on-chain data analytics firm Arkham issued an alert about nearly $28 million worth of Bitcoin being transferred by investment fund Jump Trading to several major exchanges.

In the past hour, Jump Trading deposited a total of $26.6M of BTC to various exchange deposit addresses.

The main exchange deposited to was Binance, with Jump sending $23.7M to their BTC deposit address there.

However, they also sent $2.18M BTC to OKX and $720K BTC to Bybit. pic.twitter.com/AzoSeQMF55— Arkham (@ArkhamIntel) April 26, 2023

Within an hour, Bitcoin's price dropped to $27,235 on Binance.

15m Chart of BTC/USDT on Binance at 08:45 AM on April 27, 2023

Subsequently, @tier10k, a popular channel known for critical crypto news and signals, claimed that Bitcoin wallets associated with Mt. Gox and the U.S. government were making transactions, suggesting a potential market sell-off.

[DB] Mt Gox and US Govt Wallets Making Transactions: Arkham Alert

— db (@tier10k) April 26, 2023

Mt. Gox, a Japanese Bitcoin exchange, is preparing to return over 142,000 BTC to creditors starting this month, as reported by Coin68. Meanwhile, the U.S. government is in the process of selling 41,500 BTC seized from illegal activities, with the first sale recorded in mid-March.

However, events took an unexpected turn when @tier10k later reported that Arkham had upgraded its alert system, which inadvertently sent false signals to users.

Today we fixed a bug related to Bitcoin alerts that caused us to no longer under-send alerts to a small subset of user’s private labels. This was one of them. This fix won’t affect any additional users, and was unrelated to labels generated by Arkham — we understand the impact… https://t.co/VqbX04J2bM— Arkham (@ArkhamIntel) April 26, 2023

Arkham admitted to the issue but added that @tier10k had labeled the Mt. Gox and U.S. government addresses prematurely without verification. Furthermore, Bitcoin's price had begun to drop between 02:17 AM and 03:01 AM, while Arkham’s alert and @tier10k’s Twitter post were issued between 03:07 AM and 03:08 AM. Therefore, Arkham and @tier10k were not the direct causes of the dump.

Attached: Screen cap from our database of when the alerts were sent. pic.twitter.com/MpBgcXjExI— Arkham (@ArkhamIntel) April 26, 2023

Some Twitter users connected the dots and concluded that the price had fallen before @tier10k's post, with the announcement about Mt. Gox and the U.S. government possibly marking the bottom of the sell-off.

Lots of confusion on today's dump

What happened:
19:17 - dumping starts
20:02 - btc bottom (dumping stops)
20:07 - @ArkhamIntel sends alerts
20:09 - @tier10k tweets about alerts

db had his alerts config'd wrong. but he didn't cause the dump. if anything he was the bottom. pic.twitter.com/9msgXNLFSQ— MidasTheFool (@MidasTheFool) April 26, 2023

After the controversy, Bitcoin's price recovered to $29,480 on the morning of April 27, before experiencing further volatile adjustments down to $28,553 on Binance.

In the past 12 hours, liquidation of derivative positions reached $260 million, with over 73% being long positions.

Derivatives Liquidation Statistics in Crypto Market at 08:45 AM on April 23, 2023. Source: Coinglass

This marks the second time this month that the crypto market has experienced unusual fluctuations due to Twitter news. On April 4, Bitcoin also saw a sell-off after a Twitter account of Cobie, a well-known industry KOL, shared an encoded message suggesting that Binance CEO Changpeng Zhao had been issued an Interpol red notice. Cobie later clarified that the encoded message was shared on Twitter "just for fun" and claimed that no one could decode it, suggesting that someone might have intentionally leaked it to create FUD.