On Thursday, the price of bitcoin fell as the market rebound stalled due to growing concerns about a possible increase in the number of tokens on the market. The situation was also stabilized by the easing of selling pressure from Mt Gox and the German government.
Writes UNN with reference to Investing.
Details
The world's largest cryptocurrency has experienced a 15% outflow over the past month, on the verge of a bear market due to lingering concerns about a possible increase in the number of tokens that are putting pressure on the markets.
Over the past 24 hours, bitcoin has dropped by 2.7% to reach $57,772.40. This week, the digital currency received a little relief thanks to several profitable purchases.
Mt Gox's problems, sales in Germany, and miner surrender put pressure on bitcoin. The forgotten crypto exchange Mt Gox remains in the spotlight of the bitcoin community after the exchange's trustees announced that they will start returning tokens to customers affected by the 2014 hack.
It is not yet known how many tokens will be issued. However, at the beginning of the year, wallets associated with the exchange activated tokens worth about $9 billion. It was also revealed that the German government unloaded bitcoins confiscated from a pirate site and potentially owns tokens worth at least $2 billion.
The sharp drop in bitcoin prices has raised concerns that the largest miners may start selling their assets to break even, especially after the reward for mining bitcoin was cut in half earlier this year.
Bitcoin remains above the four-month low reached in early July, as the recent price decline has led to a significant influx of bargain-hunting. Investments in bitcoin-related products, including exchange-traded funds, have increased over the past week, helping to restore confidence in the cryptocurrency. This helped keep the price of bitcoin from hitting recent lows.
Sentiment for cryptocurrency ETFs is likely to improve in the coming weeks, especially as the Securities and Exchange Commission plans to make a key decision on spot ETFs for Ether, the world's second-largest cryptocurrency.
In the broader cryptocurrency market, the major altcoins showed mixed results, but also suffered significant losses in recent weeks due to the shift of sales from bitcoin to them. Ether is down 0.1% to $3,099.20, while XRP is up 1%. ADA rose by 2.5%, and SOL dropped by more than 2%. Among the meme tokens, DOGE was down 1.1%.
Growing optimism about lower interest rates in the United States affected the dollar, but did not provide significant support for cryptocurrency prices. Federal Reserve Chairman Jerome Powell noted that inflation is declining, but warned that the central bank still needs more confidence to cut interest rates.
Attention will now turn to key consumer price index data due later on Thursday to provide further clues on rates.
Recall
Bitcoin failed to reach the level above $70,000 again . Analyzing the latest data on liquidations, ETF activity, and market reports, Investing identified the main reasons for this trend.