Markets
Bitcoin at Four-Month Low: Why Is Cryptocurrency Market Down Despite Market Rally?
Bitcoin Price: Early on July 5th, Bitcoin fell more than 8% to $53,523, which traders noted was below chart support at $55,000, and to its lowest price in four months since February 2024, Reuters reported.
Furthermore, the largest in the world cryptocurrency in terms of market capitalization, it lost part of its weekly gains of 12%, even as global markets signaled green.
Beyond Bitcoin, Ether also fell 9 percent — a two-month low for the crypto. Other smaller coins, such as Cardano and XRP, also saw losses of more than 10 percent, according to Bloomberg.
Points of concern
Traders predicted the dump of long-lost assets files of Mt. Gox, a now-defunct Japanese cryptocurrency exchange, which media reports said would return Bitcoin to creditors and further “frightened” selling by leveraged investors, the Reuters report added.
Mt. Gox collapsed in 2014. There are fears that the $8 billion worth of tokens being released in stages would lead to further sell-offs. The Bloomberg report cited Arkham Intelligence to note that one wallet linked to Mt. Gox alone moved $2.7 billion worth of its tokens as of July 5.
“Selling pressure is still related to the sell-off by creditors of the failed Mt Gox exchange. However, the acceleration to the downside suggests the market is trying to get ahead of creditor flows,” said Tony Sycamore, a Marketplace IG analyst told Reuters.
There is also uncertainty about the Democrats’ replacement Joe Biden as its presidential candidate with someone less supportive of cryptocurrency. The Reuters report added that the initial momentum of U.S.-based Bitcoin exchange-traded funds (ETFs) also appears to have petered out. Bitcoin hit a record high of $73,803.25 in March, supported by the Bitcoin ETF.
In a likely bullish call, Stefan von Haenisch, head of trading at OSL SG Pte, told Bloomberg that the cryptocurrency market needs “more moderate notes on monetary policy from the Federal Reserve” and that “a rate cut or two, coupled with the expansion of the Fed’s balance sheet, are two key ingredients that cryptocurrencies are really waiting for.”
The Bloomberg report also noted that investors are awaiting jobs data to gauge the Fed’s likely action.
(With input from Reuters and Bloomberg)
3.6 Crore Indians visited in a single day choosing us as India’s undisputed platform for General Election Results. Explore Latest Updates here!
Topics that may interest you