Bitcoin prices dropped on Wednesday amid concerns over potential token distributions from the defunct Mt. Gox exchange, which reportedly moved about $2 billion worth of Bitcoin. This move raised fears of increased supply in the market. The broader market also experienced a cooling in risk sentiment, following an eight-day rally in Wall Street that came to an end.
By 01:38 ET (05:38 GMT), Bitcoin had fallen 2.8% to $59,397.1, failing to maintain support above the critical $60,000 level.
Mt. Gox’s Potential $2 Billion Bitcoin Move Spurs Distribution Fears
A wallet associated with Mt. Gox was observed mobilizing around $2 billion worth of Bitcoin, potentially signaling more token distributions. The exchange, which collapsed after a major hack in 2014, started returning stolen tokens to clients in early July. This action initially led to sharp declines in Bitcoin prices due to fears of increased supply and the potential for a massive sell-off.
Although Bitcoin recovered much of the initial losses, traders remain cautious about further distributions from Mt. Gox. The exact amount of Bitcoin held by the exchange remains unclear, but earlier this year, it was reported to have moved approximately $9 billion worth of tokens.
Bitcoin Struggles to Sustain Above $60k as Market Awaits Positive Cues
While Bitcoin managed to recoup some of the losses from early August, it has struggled to consistently break above the $60,000 level due to a lack of positive market signals. Despite a boost in broader risk sentiment from expectations of U.S. interest rate cuts and a potential soft landing for the economy, Bitcoin’s recovery lagged behind that of the stock market.
This sluggish performance comes amid declining capital inflows into cryptocurrency investment products, with trading volumes significantly lower compared to the highs seen during the launch of spot Bitcoin exchange-traded funds earlier this year.
Altcoins Drift Lower as Markets Await Fed Signals
Broader altcoin prices also declined on Wednesday, following Bitcoin’s downward trend. Ether, the world’s second-largest cryptocurrency, fell 3.4% to $2,594.51. Other altcoins like SOL and XRP saw losses between 2% and 3%, while MATIC and ADA bucked the trend, rising by 5.3% and 3.3% respectively. Among meme tokens, DOGE dropped 1.4%.
Investors are now focused on potential cues regarding U.S. interest rate cuts, with the minutes from the Federal Reserve’s late-July meeting set to be released later on Wednesday. The Fed had indicated a dovish stance during that meeting, and Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium on Friday is expected to provide further insights into the central bank’s plans, especially amid growing speculation of a rate cut in September.
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