Rebounds to $58.5k as Mt Gox Losses Prompt Bargain Buying

Bitcoin’s price experienced an upward trend on Wednesday, as it bounced back from recent declines, thanks to bargain hunters capitalizing on the lower prices. However, the overall sentiment in the market remained cautious, influenced by increased supply from the defunct exchange Mt. Gox and Bitcoin sales by the German government.

The second-largest cryptocurrency, Ether, also saw gains as the market anticipated a crucial decision from the Securities and Exchange Commission regarding a spot exchange-traded fund (ETF).

Bitcoin rose 1.7% within the past 24 hours, reaching $58,423 by 08:31 ET (12:31 GMT), briefly surpassing the $59,000 mark before its gains moderated.

### Bitcoin Benefits from Bargain Hunting Amid Supply Concerns

The primary driver behind Bitcoin’s recent price increase was the influx of bargain hunters taking advantage of the previous downturn. Investment products related to cryptocurrencies, including Bitcoin ETFs, have observed increased capital inflows amid this shift in sentiment.

Despite this bounce back, the mood surrounding cryptocurrency remained shaky due to lingering uncertainty about how many tokens will be distributed by Mt. Gox as part of a compensation plan stemming from a hack in 2014. Earlier this year, Mt. Gox was thought to be set to release around $9 billion worth of Bitcoin, which poses a substantial risk to current market prices.

Furthermore, reports indicated that the German government was also offloading Bitcoin that had been confiscated from a piracy website, amounting to approximately $2 billion worth. This ongoing sale has contributed to the worries surrounding increased supply in the market.

A recent decline in the dollar provided some relief for Bitcoin prices, although the dollar stabilized this week after Federal Reserve Chair Jerome Powell’s testimony, where he provided no clear guidance regarding interest rate cuts. Market attention is also focused on significant inflation data expected to be released soon.

### Crypto Market Update: Ether Rises Amid ETF Speculation

The overall cryptocurrency market reflected Bitcoin’s recovery. Ether climbed 0.7% to $3,105.34 as anticipation grew over a potential approval from the SEC for modified applications for a spot Ether ETF, which may occur as early as mid-July. This approval is expected to draw institutional investment into the second-largest cryptocurrency.

Other altcoins also saw positive movement, with some improving on the prospect of a spot ETF. Memecoins also gained in value, with noticeable increases among popular tokens.

### Short-Lived Recovery Predicted for Bitcoin, Analysts Say

While the recent upward momentum may provide a short-term boost towards the $60,000 level, analysts at 10x Research cautioned that this rally is likely to be temporary. They noted that the price range between $55,000 and $56,000 appears to be forming a base from a technical analysis perspective, but the overall market has sustained damage that may hinder a lasting recovery.

They predict that Bitcoin could escalate back to around $60,000 before facing another decline, potentially dipping back into the low $50,000 range, thus creating a complicated trading environment.

Additionally, K33 Research highlighted that seasonal trends traditionally do not favor Bitcoin, as the third quarter often yields the weakest returns. Estimates suggest the market will need to accommodate the sale of between 75,000 and 118,000 BTC from Saxony and Mt. Gox customers over the summer, valuing between $4.3 billion and $6.8 billion based on current prices.