Investing.com– Bitcoin fell sharply to a two-month low on Thursday, breaking through a key support level, as uncertainty over several selling pressure points, mainly the closed Mt. Gox exchange, kept investors wary of the token.
The world’s largest cryptocurrency received little support from a feeble dollar, which fell amid increased bets on interest rate cuts by the Federal Reserve. Broader cryptocurrency prices also tracked Bitcoin’s decline.
At 06:00 ET (10:00 GMT), the stock was down 5% to $57,722.0, just above the session low of $57,053.
Mt Gox, eviction fears undermine Bitcoin
Bitcoin has seen gigantic declines in the past week as investors braced for a potential sell-off, largely due to the closure of cryptocurrency exchange Mt Gox.
The exchange’s liquidators said they would begin returning Bitcoin stolen in the 2014 hack to customers starting in early July. While the scale of the distribution remains unclear, traders are betting that given Bitcoin’s massive price rise over the past decade, most of the token’s recipients will be willing to sell.
Such a scenario presents a lot of selling pressure on Bitcoin. Several gigantic whales have been spotted mobilizing Bitcoin on exchanges for selling, while the token has also been under pressure from the reported sale of confiscated tokens by the German government.
Fears of a massive sell-off have left traders largely wary of the world’s largest cryptocurrency. That selling pressure has spilled over into broader crypto markets, even as recent data has shown some improvement in capital flows into cryptocurrencies.
Bitcoin market ‘extremely stalwart’
Despite these losses, however, modern analysis from Glassnode suggests that the Bitcoin market remains remarkably stalwart. According to the on-chain analytics platform, total investor profitability is still high, with the average coin having a 2x earnings multiple.
Glassnode analysis reveals that the average gaining coin has an unrealized profit of $41,300, with a base cost of around $19,400, while the average losing coin has an unrealized loss of $5,300, with a base cost of around $66,100. This discrepancy highlights potential selling pressure points as traders consider taking profits versus mitigating losses.
The average base cost per lively trader remains at around $50,000, Glassnode says, which is a key level the market needs to maintain to sustain a macro bull market.
Cryptocurrency Price Today: Altcoins Fall, Interest Rate Optimism Doesn’t Provide Much Support
Cryptocurrency prices also fell on Thursday and have also suffered over the past week.
The world’s No. 2 token fell 5.4% to $3,161.49 as investors largely ignored recent speculation about a spot Ether ETF. Ether hit its lowest level in over a month, largely erasing gains made in May on a wave of hype surrounding the spot ETF.
and fell between 4% and 8%, while meme coins fell by about 8% each.
Cryptocurrency prices did not see much support from the feeble dollar, which fell on feeble data on the jobs market and economic activity, which raised expectations for a Fed rate cut.
Hawkish signals in the minutes of the Federal Reserve’s June meeting have cooled that optimism somewhat, with several Federal Reserve officials expressing caution about cutting interest rates.
Attention has now turned to key data due for publication on Friday, which is expected to provide more concrete guidance on the labour market situation.
(Ambar Warrick contributed to this article.)
