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Bitcoin price today: flat at $58.5k as recovery stalls; Mt Gox fears persist

Bitcoin Price Sees Marginal Increase Amid Ongoing Supply Concerns

July 12, 2024

Bitcoin Price Today: Flat At $58.5K As Recovery Stalls; Mt Gox Fears Persist
Bitcoin Price Today: Flat At $58.5K As Recovery Stalls; Mt Gox Fears Persist
Bitcoin Price Today: Flat At $58.5K As Recovery Stalls; Mt Gox Fears Persist
Bitcoin Price Today: Flat At $58.5K As Recovery Stalls; Mt Gox Fears Persist

Bitcoin’s price experienced a slight uptick on Thursday, rising by just 0.1% to $58,549.6 as of 08:09 ET (12:09 GMT). Despite this marginal gain, the cryptocurrency continues to grapple with significant challenges, including increased token supplies and persistent selling pressure from sources such as Mt Gox and the German government.

Struggles and Supply Concerns

Over the past month, Bitcoin has suffered a 15% decline, nearing bear market territory. The defunct crypto exchange Mt Gox remains a critical issue for Bitcoin. Trustees of the exchange, which was hacked in 2014, have started returning tokens to affected clients. The extent of this distribution is unclear, but earlier this year, wallets linked to Mt Gox mobilized approximately $9 billion worth of tokens.

Additionally, the German government has been offloading Bitcoin confiscated from a piracy website, potentially holding up to $2 billion in tokens. The declining price of Bitcoin has raised concerns that major miners might sell their holdings to break even, especially after Bitcoin’s recent halving reduced miner rewards.

Market Reactions and Bargain Buying

Despite the challenges, Bitcoin has remained above its four-month low from earlier in July. Recent price declines have triggered some bargain buying, offering limited relief. Over the past week, capital inflows into Bitcoin investment products, especially exchange-traded funds (ETFs), have increased, instilling some confidence in the currency and preventing further declines.

Sentiment towards crypto ETFs is expected to improve in the coming weeks, particularly as the Securities and Exchange Commission (SEC) prepares to make a key decision on spot ETFs for Ether, the world’s second-largest cryptocurrency.

Broader Cryptocurrency Market

In the broader cryptocurrency market, major altcoins have seen gains. Ether rose by 1.3% to $3,149.32, XRP increased by 2%, ADA climbed by 3%, and SOL added 0.5%. Meme tokens like DOGE and the Investing.com Shiba Inu Index remained mostly flat.

Improved optimism regarding potential U.S. interest rate cuts has weakened the dollar, although this has offered limited support to cryptocurrency prices. Federal Reserve Chair Jerome Powell noted progress in reducing inflation but emphasized that more confidence is needed before cutting interest rates. Investors are now focused on the upcoming consumer price index data for further rate-related cues.

Speculation Index and Bitcoin Prices

The speculative fervor in the crypto markets seen in the first quarter has diminished, potentially signaling a resurgence in Bitcoin prices. Capriole Investment’s crypto speculation index, which tracks the percentage of altcoins with 90-day returns greater than Bitcoin, has fallen below 10%, significantly lower than its January peak of nearly 60%.

Historically, a speculation index below 10% has marked the beginning of significant Bitcoin rallies, as observed in the first half of 2019, late 2020, and the second half of 2023. Speculative washouts act as corrective mechanisms, aligning asset prices with fundamentals and fostering a healthier long-term market environment.

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