Bitcoin Slides to $60K Amid Mt Gox Dumping Fears

Bitcoin’s value experienced a decline on Wednesday, extending earlier losses as traders remained cautious about the cryptocurrency. Concerns surrounding the distribution of Bitcoin from the defunct exchange Mt. Gox have led to fears of a potential mass sell-off.

Overall sentiment in the cryptocurrency market continued to be negative, compounded by uncertainty regarding U.S. interest rates. Despite a recent decrease in the dollar’s strength, it did little to bolster the crypto sector, which remains under pressure.

As of 08:20 ET, Bitcoin had fallen 4% in the past 24 hours, trading at $60,339.1. The leading cryptocurrency has faced significant challenges throughout June and remains trapped within a trading range established since March.

Traders are particularly anxious about the anticipated distributions from Mt. Gox, where liquidators have indicated they will begin returning Bitcoin stolen during a 2014 hack to clients by early July. The exchange had previously earmarked around $9 billion worth of Bitcoin for distribution, though the specifics of the distribution amounts remain unclear. Many believe that the recipients may be encouraged to sell their tokens, considering Bitcoin’s substantial price increases over the past decade, potentially leading to sustained selling pressure.

Moreover, concerns about further Bitcoin sales from other entities have added to the unease. The German government has been seen selling Bitcoin recovered from an illegal website, and large holders, often referred to as “whales,” have also been actively moving their Bitcoin recently.

Even before the Mt. Gox concerns took center stage, overall sentiment in the crypto market had begun to cool, with Bitcoin trading within a narrow range for over three months. Data on capital flows indicated a significant decline in trading volumes for cryptocurrency exchange-traded funds, particularly those focusing on Bitcoin.

In terms of broader cryptocurrency prices, most displayed downward trends, with little support from the overnight decrease in the dollar. The second largest cryptocurrency, Ether, dropped 4.5% to $3,296.01, facing weak sentiment despite speculation that a spot Ether ETF could receive approval soon. Other cryptocurrencies experienced losses ranging from 1% to 4.5%, with meme tokens like Dogecoin and Shiba Inu also falling over 4% each.

The cryptocurrency market struggled to gain traction even as Federal Reserve Chair Jerome Powell indicated progress in reducing inflation, which negatively impacted the dollar. However, he cautioned that the Fed would need more confidence before considering cuts to interest rates. His remarks came just ahead of essential updates on U.S. interest rates, with minutes from the Fed’s June meeting set to be released, along with several Fed officials scheduled to speak. Additionally, economic data is expected on Friday.

Looking ahead, analysts at Standard Chartered have projected a bullish outlook for Bitcoin, predicting it could reach new all-time highs in August and possibly rise to $100,000 by the U.S. presidential election in November. They noted that this forecast hinges on President Joe Biden remaining in the race, as a potential Donald Trump victory is seen favorably for Bitcoin due to expectations of more favorable regulations and mining practices under his administration.

In a less probable scenario where Biden exits the presidential race in late July, analysts warned that Bitcoin prices could drop to the range of $50,000 to $55,000.