Bitcoin prices dropped on Thursday amid renewed concerns over token distributions by the defunct Mt. Gox exchange and capital outflows from major exchanges, which furthered a risk-off sentiment.
Fears of increased selling pressure largely offset positive signals from U.S. inflation and interest rate data, causing Bitcoin and the broader crypto markets to lag behind a rally in risk-driven assets.
Bitcoin fell nearly 4% to $58,467.0 by 01:46 ET (05:46 GMT).
Mt. Gox Fears Reemerge After Test Transactions
Concerns over selling pressure from token distributions by the defunct Mt. Gox exchange resurfaced this week after a wallet associated with the exchange, holding $2 billion in Bitcoin, was observed conducting test transactions. This move could signal a new round of token distributions, following the exchange’s start of returning Bitcoin stolen during a 2014 hack to clients in July.
While the exact amount of Bitcoin involved in Mt. Gox’s distributions remains unclear, traders were nervous about the potential for increased selling pressure on Bitcoin.
Earlier this year, Mt. Gox was seen mobilizing about $9 billion in Bitcoin.
USDT Outflows May Signal Further Price Weakness
Digital assets research firm IntoTheBlock reported on Wednesday that around $1 billion of the stablecoin USDT was withdrawn from crypto exchanges this week.
Significant USDT outflows have often preceded price weakness in Bitcoin in recent months, potentially indicating that traders are pulling funds from exchanges in anticipation of a risk-off event.
Crypto Prices Today: Altcoins Dip Despite CPI Data
Broader cryptocurrency prices fell on Thursday, lagging behind a rally in other risk-driven assets as fears related to Mt. Gox distributions and exchange withdrawals weighed heavily.
Softer-than-expected consumer price index inflation data provided little support for crypto prices, even as broader risk-driven markets, particularly stocks, rallied on the prospect of lower interest rates.
However, with CPI data showing a month-on-month increase, traders are positioning for a smaller interest rate cut by the Federal Reserve in September, limiting the extent of the risk-on movement.
Ether, the second-largest cryptocurrency by market cap, fell 3.1% to $2,638.30, while SOL, XRP, and ADA each declined by over 1%.
Among meme tokens, DOGE dropped 3.4%.
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