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Drops to Two-Month Low; $50K Becomes Key Support By Investing.com
Investing.com — Bitcoin price fell sharply on Thursday, hitting a two-month low and breaking above a key support level, as uncertainty over several selling pressure points, most notably the defunct Mt Gox exchange, prompted traders to continue to balk at the token.
The world’s largest cryptocurrency received little support from a weak dollar, which fell amid growing bets on interest rate cuts by the Federal Reserve. Broader cryptocurrency prices also followed Bitcoin’s decline.
By 06:00 ET (10:00 GMT), it was down 5% to $57,722.0, just above the session low of $57,053.
Mt Gox Dumping Fears Hit Bitcoin
Bitcoin suffered sharp losses last week as traders braced for a potential mass sell-off event, largely stemming from the defunct cryptocurrency exchange Mt Gox.
The exchange’s liquidators said they would begin returning bitcoin stolen in a 2014 hack to customers in early July. While the scale of the distribution remained unclear, traders had been betting that given bitcoin’s massive price appreciation over the past decade, most of the token’s recipients would be inclined to sell.
Such a scenario presents a great deal of selling pressure on Bitcoin. Several large whales have been seen mobilizing Bitcoin on exchanges for a sell-off, while the token has also been pressured by the reported sale of tokens confiscated by the German government.
Fears of a mass sell-off have seen traders become largely averse to the world’s largest cryptocurrency. This selling pressure has spilled over into broader crypto markets, even as recent data has shown some improvement in capital flows into cryptocurrencies.
Bitcoin Market Is ‘Remarkably Robust’
However, despite these losses, a new analysis from Glassnode suggests that the Bitcoin market remains remarkably robust. According to the on-chain analytics platform, aggregate investor profitability is still strong, with the average coin holding a 2x profit multiple.
Glassnode’s analysis reveals that the average profit coin holds an unrealized gain of $41,300, with a cost basis of about $19,400, while the average loss coin holds an unrealized loss of $5,300, with a cost basis of about $66,100. This divergence highlights potential selling pressure points as investors weigh realizing gains versus mitigating losses.
Glassnode said the average cost of ownership per active investor remains around $50,000, a key level the market must overcome to maintain the macroeconomic bull market.
Cryptocurrency Price Today: Altcoins Tumble, Rate Optimism Provides Little Support
Cryptocurrency prices in general also fell on Thursday and continued to suffer over the past week.
The world’s No. 2 token fell 5.4% to $3,161.49 as traders largely ignored recent speculation about a spot Ether exchange-traded fund. Ether hit a more than one-month low, having largely erased gains made in May on hype for a spot ETF.
and have slipped between 4% and 8%, while among meme coins, and have lost about 8% each.
Cryptocurrency prices received little support from a weak dollar, which fell as a series of weak labor market and business data raised expectations of interest rate cuts by the Fed.
The hawkish signals from the minutes of the Fed’s June meeting somewhat dampened that optimism, as several Fed officials expressed caution about interest rate cuts.
Attention has now turned to key data due on Friday, which is set to provide more definitive guidance on the labor market.
(Ambar Warrick contributed to this article.)