Flat at $58.5K as Recovery Stalls; Mt. Gox Concerns Remain

Bitcoin prices experienced a slight increase on Thursday, although the recent rebound seemed to be losing momentum due to ongoing concerns about rising token supplies and a lack of signs that selling pressure from Mt. Gox and the German government had diminished.

Currently, Bitcoin, the largest cryptocurrency, is grappling with a 15% decline over the past month and is hovering on the verge of entering bear market territory, largely impacted by anxiety over increased token availability. As of 08:09 ET (12:09 GMT), the price of Bitcoin rose by 0.1% in the past 24 hours to $58,549.60, benefiting slightly from some bargain hunting observed this week.

### Impact of Mt. Gox, German Sales, and Miner Selling

Bitcoin remains under significant stress from the situation involving the now-defunct Mt. Gox crypto exchange. The exchange’s trustees recently announced the commencement of returning tokens to clients affected by a hacking incident in 2014. The exact amount involved in this distribution remains unclear, but wallets associated with the exchange have already moved around $9 billion worth of tokens earlier this year.

Additionally, the German government has been selling Bitcoin it confiscated from a piracy website, with estimates suggesting it could hold at least $2 billion worth of tokens. Sharp decreases in Bitcoin’s price have raised concerns that major miners may need to liquidate some of their holdings to cover costs, especially after Bitcoin’s halving earlier this year cut miner rewards.

### Bargain Buying Helps Mitigate Losses

Despite the struggles, Bitcoin is still holding above four-month lows reached in July thanks to a surge of bargain buying. Over the past week, capital inflows into Bitcoin investment products, particularly exchange-traded funds, have risen, fostering some optimism in the market and preventing Bitcoin from hitting recent lows. Expectations for improved sentiment towards crypto ETFs are growing, especially as regulators are set to make a crucial decision regarding spot ETF applications for Ethereum, the second-largest cryptocurrency.

### Broader Crypto Market Movements

In the wider cryptocurrency market, many major altcoins were exhibiting positive performance. Certain tokens saw increases of over 3%, while several meme tokens remained mostly steady. Optimism regarding potential U.S. interest rate cuts had mixed effects, as it did little to boost crypto prices despite Federal Reserve Chair Jerome Powell noting progress in reducing inflation but emphasizing the need for continued confidence before implementing cuts. Market attention is now focused on key economic data expected later on Thursday, which could provide further insights into interest rates.

### Speculative Index Decline May Support Bitcoin Prices

The intense speculative activity that characterized the crypto markets in the first quarter has receded, which may pave the way for a rebound in Bitcoin prices. The crypto speculation index from Capriole Investments, which measures the proportion of altcoins with 90-day returns exceeding Bitcoin’s performance, has fallen below 10%, a notable drop from nearly 60% in January. Although Bitcoin’s value has cooled from record highs of over $70,000 reached in the first quarter to its current level around $58,000, historically, a sub-10% speculation index has often preceded significant rallies in Bitcoin, as seen in various periods throughout the past few years.