Bitcoin has become one of the most profitable assets in 2023. The banking crisis in the US and elsewhere in the world, which is still going on, has also contributed to this. The fact is that the March collapse of Silicon Valley Bank, Signature and Silvergate clearly showed the weakness of the banking system. And while cryptocurrencies have serious volatility and the ability to fall in value, they most often have a fixed rate of inflation – which is a serious advantage in the current environment.

Economists are now focusing their attention around First Republic Bank, which has also seen a massive withdrawal of user deposits. According to CNN, the volume of deposits at the bank dropped by 41 percent in the first quarter of 2023, which quite predictably creates liquidity and solvency problems. It is assumed that the financial institution may not survive the current situation.

Against this backdrop, the bank’s shares have fallen 58 per cent in just the last five days.

At the same time, they have fallen by 95 per cent since the beginning of the year.

Although the banking crisis is not over, Bitcoin is also proving to be vulnerable. However, the reasons for its fall are often far from clear – as they are now.

Why has Bitcoin fallen?

Information from Arkham Intelligence analysts quickly spread on Twitter thanks to the well-known DB account, which now has 288,000 followers. It is important to note that this account is very popular among cryptocurrency and finance enthusiasts in general, so the news impacted the market quite quickly.

Some time later, the official Arkham Intelligence account posted another message. According to the platform’s representatives, the initial information about the movement of coins was inaccurate and appeared due to a bug within the platform. However, the markets have already managed to panic over what’s happening, causing coin rates to plummet. Here’s the relevant Bitcoin chart, which shows the collapse and the asset’s rapid recovery.


As a reminder, Mt.Gox is a popular cryptocurrency exchange that went offline on 24 February 2014. The reason for this was the hacking of the platform and the subsequent theft of 744,000 bitcoins. As a result, victims of the hack are now waiting for a refund, so any reports of alleged BTC movements associated with the platform are perceived as a risk by cryptocurrency enthusiasts. They speculate that many investors will want to get rid of the coins received, well this will allegedly lead to a market crash.

In this regard, experts believe that the collapse could have been triggered by the mass sale of coins due to algorithms that are set up for such mentions to appear in the information space. Many traders use bots to trade, which scan social media posts and the internet in general. This is why Ilon Musk's tweets about the notional Dogecoin lead to an instant rise in the cryptocurrency's value - bots are behind it, reacting to what is happening and opening long positions.


According to Cointelegraph’s sources, after another hour, Arkham representatives published the following tweet

We investigated the situation with DB’s information and found that in this case the Arkham alerts were sent accurately. The DB bot posted two alerts for all bitcoin transactions over $10,000, without specifying counterparties, then called the alerts “Mt Gox” and “US Gov”.

So it turns out that the information about the movement of coins was indeed confirmed, but this event was not something extraordinary. According to the experts, there is no way it could have caused the initial market decline. Here is their rejoinder.

Neither the alert nor the tweet could have caused the BTC price to plummet today, as the drop occurred between 19:17 and 20:01 UTC, while the alert and tweet were sent afterwards at 20:07 UTC and 20:08 UTC respectively.

It turns out that the market crash tentatively took place before the relevant data was published. However, this does not make the situation any clearer, because this tweet alone raises many questions.

At the same time, according to the user under the nickname IT Tech, there were no transfers from wallets associated specifically with Mt. Gox. The US government’s wallet for funds from the Silk Road darknet marketplace hack did have one transaction from April 26, 2023. However, it was an incoming BTC transfer totaling about 19 cents.

That is, the crypto market initially collapsed for a now unknown reason, but further collapse was facilitated by news and reactive bots. All this led to liquidations of long leveraged positions worth over $200 million in an hour.

Today – after all that has happened – Bitcoin’s value has rebounded slightly, with the main cryptocurrency trading just below $29,000 during the day.


We think the search for the cause of the cryptocurrency market collapse tonight is in a position to end up with nothing, as the real reason for the collapse could be anything. However, the tweet about bitcoin allegedly being moved by the US government and cryptocurrency exchange Mt.Gox clearly made matters worse, as traders often set up their algorithms to assess the general sentiment in the industry and automatically open corresponding positions. So it's easier for coin niche participants to target long timeframes for their own investments, rather than getting nervous about any red candle on the scale of a few hours.


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