My conclusion is that we will have more "used to be frozen" Bitcoin circulating in the market which might inflict few damage in the Bitcoin price in short term especially if it coincides with a high selling trend, otherwise in the medium and long term, the return of investment of these coins will pay itself.

I mean to be fair if the panic due to Mt.Gox already triggered such massive sell off, the event in which MtGox paid BTC is finally ready to sell gonna create bigger impact, the main factor that moves the market right now is always FUD and shill.

The big players know that they can move the market without capital just by fudding BTC with these news, the Mt.Gox sell off will have massive effect and create panic in the market undeniably despite the fact that market itself is kinda resilient to such sell off as shown from the current amount of sold BTC, The market definitely has the money to contain all those dumps but it's always the FUD that magnify the effect and some people just trying to find opportunity buying BTC at lower price after mt.gox sell off by selling it now kinda make it worse.

Yeah, Mt.Gox only moved 1,500 BTC and German Government moved 4,000 BTC.

It's really far to hit 400,975 Bitcoin that has been sold today, I think people who sell that much are retailers who don't have any idea with Bitcoin, but they buy it since they think Bitcoin will double or triple their money in next few months.

Even both Mt.Gox and German Government dump all of their coins, it's not even enough to dump Bitcoin to $52K.

I try to use another model and for me my point still on the whole holds, even with a larger number of coins "sold yesterday" (but it means something slightly different, see below).

I played a bit with the 5-minute candles on Binance of yesterday. If you aggregate green candles as "buys" and red candles as "sells", then regarding volume during the 7 hours of the main dump (~9.2% down from 58500 to 53800 between 7PM and 1AM UTC) then the relation between the volume of red candles and green candles was slightly above 2:1.

So we could guess: If we assume the rest of the day the relation between buys and sells was in equilibrium (the market moved largely sideways before and after the dump in a "stair" pattern, and a quick look at the candles seems to confirm that), then we had a relation of 1.29 to 1. This means: For each coin bought, 1.29 would have been sold.

Or in other words: 56% of the coins traded this day were "sold", 44% were "bought". The total volume were 912000 BTC, and 56% of these are thus around 510000. This means something slightly different as in the other calculation, because it includes the coins sold by short-term traders. We can paraphrase it to: 110000 coins more were sold than those that were bought.

Let's now go back to the Goxcoins. And let's assume the absolute worst case: all 140000 BTC are sold a single day. This means about 8 billion worth of USD per day are added to the sell side.

Let's assume that all other conditions stay the same - no more dip fishers, no more panicking weak hands. If we assume that at equilibrium (sideways market) we have a volume of 30 billion or 526000 coins on weekdays (1:1 relation), this would drive the volume from this "equilibrium" to 38 billion.

Yes, this would cause a quite big drop probably, because the relation between buy and sell orders would be a bit higher than yesterday's 1.29:1, it would be close to 1.5:1. Thus, I'd expect a dump in the region of 15-20%.

But the scenario is quite unrealistic, because MtGox distribution has already begun but only a fraction of the coins are paid out each day.

Where you're right is that in certain conditions a single larger dump can trigger other dumps, mostly when there's too much leverage in the market. However, afaik liquidations in yesterday's dump were only worth 600 millon USD, which were about 1.2% of the total volume.

But it's exactly this market dynamic people need to be conscient about. These dumps would be the result of either excessive greed (liquidations) or excessive fear combined with shorting. It's not caused directly by the supply surplus but by mass psychology.

Well today some were already distributed by MtGox ... and the price even recovered a little bit. The dump was earlier than the start of the BTC distribution, afaik. It came after the 47k coins were moved from the cold wallet.

That's exactly what I want to line out with this thread. If there is panic/FOMO, then the movements are probably much larger than as a consequence of a simple sequence of large orders. Of course this also works the other way around, that's why I'm actually less bullish than most about the ETF "inflows" and also about halving effects.

Okay, so MtGox distribution is slowly going on, the LKA Saxony (generally referred to as "Germany" or "German BKA") has sold ~45000 coins (according to last data available on the Wall Observer, see here). And we've not seen lower lows.

Price is still a bit weak, but has recovered and even got several times above 59k, although the 60k region remains a resistance (until now). For me that's a good sign in general, the market is strong enough to digest these coins.

I agree actually with you @stompix about the difference if the coins are sold at 60k or 50k. Thus, the #GoxCoinPanic dump may have even a positive side: the impact on liquidity of the "real" Goxcoins is smaller than at 60 or even 70k.

I guess with the remaining Gox coins the "digestion" will be even better as I don't expect them to be sold in too large chunks, and much less in a few days like the LKA Saxony did.