Climbs Near $63K with Mt. Gox, Rate Signals in Focus

Bitcoin experienced a rise on Monday, recovering some of its recent losses, although overall sentiment towards the cryptocurrency and the broader market remained largely negative.

Market participants were anxious about a potential major liquidation event, as the now-defunct exchange Mt. Gox is set to begin distributing stolen tokens starting this week. Additionally, the anticipation surrounding U.S. interest rates, influenced by the Federal Reserve and upcoming economic data, contributed to the cautious market sentiment.

In a 24-hour period, Bitcoin increased by over 2%, reaching $62,838.90 by 08:59 ET. The price also benefited from a decline in the dollar, which lost around 0.2% on Monday.

### Mt. Gox Bitcoin Distribution Begins

The liquidators of Mt. Gox announced that they will commence distributing Bitcoin that was stolen in a 2014 hack, starting early July. Traders speculate that many recipients of these stolen tokens might be inclined to sell, given the significant increase in Bitcoin’s value over the last decade. Such selling could exert substantial pressure on Bitcoin prices, a concern that previously led to steep losses at the end of June.

Additionally, crypto investment products have experienced two consecutive weeks of outflows, as fears of increased selling pressure lingered.

### Crypto Market Update: Altcoins on the Rise

In the wider cryptocurrency market, altcoins also saw gains on Monday, recovering from significant losses in June. The second-largest cryptocurrency registered a 2.6% increase to $3,475.84, buoyed by speculation that regulators may approve a spot Ether exchange-traded fund soon.

Other cryptocurrencies including multiple popular tokens saw increases between 1.9% and 4.5%, although trading volumes were relatively low. Meme cryptocurrencies also climbed modestly.

Despite the price increases, overall sentiment in the crypto market remained cautious ahead of various signals regarding U.S. interest rates this week. Federal Reserve Chair Jerome Powell is scheduled to speak on Tuesday, and minutes from the Fed’s June meeting are set for release on Wednesday. Economic data due on Friday will further inform traders about potential interest rate adjustments.

Traders appeared to be increasing their bets on the Fed’s actions, which provided some support to the cryptocurrency market.

### Bitcoin Facing Potential Selling Pressure at $65,000

According to on-chain data, Bitcoin may encounter resistance around the $65,000 mark. The leading cryptocurrency is attempting to rebound after a 7% decline in June, a drop attributed to miner selling and concerns regarding ETF inflows not being based on bullish investments.

This decline has pushed Bitcoin prices below the aggregate cost basis for short-term holders—defined as wallets holding Bitcoin for 155 days or less. This aggregate cost basis is currently around $65,000.

On-chain analytics firms use realized price as this cost basis, which reflects the average price at which coins were last transacted on the blockchain.

As a result, short-term holders are now facing potential losses or maintaining positions in negative territory, which might compel them to sell around the $65,000 level. Analysts have pointed out that this could lead to increased selling pressure as market speculators look to exit their positions at breakeven prices.

It was noted that when Bitcoin previously fell below this support level in August 2023, the price traded sideways for two months before eventually breaking out again.