Aug 21 2024: Bitcoin’s price declined on Wednesday as concerns grew over potential token distributions from the defunct Mt Gox exchange, which appeared to have moved approximately $2 billion worth of Bitcoin. This movement rattled market sentiment, leading to a broader sell-off.
Risk sentiment also weakened as Wall Street ended its eight-day winning streak, with traders seeking fresh positive signals to continue the mid-August rally.
By 01:38 ET (05:38 GMT), Bitcoin had dropped 2.8% to $59,397.1 after failing to maintain the critical $60,000 support level.
Mt Gox’s $2 Billion Bitcoin Movement Sparks Fears of Distribution
A wallet associated with Mt Gox reportedly mobilized around $2 billion worth of Bitcoin, raising fears of further token distributions. The exchange, which began returning tokens to clients in early July following a 2014 hack, initially triggered a sharp decline in Bitcoin prices due to fears of increased supply and a potential mass sell-off.
Although Bitcoin recovered much of the initial losses, traders remain cautious about additional distributions. The exact amount of Bitcoin held by Mt Gox is unclear, but the exchange was previously seen moving about $9 billion worth of tokens earlier this year.
Bitcoin Faces Resistance at $60K, Awaits Positive Market Signals
Bitcoin has struggled to consistently break above the $60,000 level, despite recovering from early August losses as fears of a U.S. recession subsided. The cryptocurrency has lagged behind the broader market recovery, which has been buoyed by expectations of interest rate cuts and a potential soft landing for the U.S. economy.
Dwindling capital inflows into crypto investment products and reduced trading volumes—especially compared to the highs seen during the launch of spot Bitcoin exchange-traded funds earlier this year—have also weighed on Bitcoin’s performance.
Altcoins Follow Bitcoin Lower as Market Awaits Fed Cues
Broader altcoin prices tracked Bitcoin’s decline on Wednesday. Ether, the world’s second-largest cryptocurrency, fell 3.4% to $2,594.51. SOL and XRP dropped between 2% and 3%, while MATIC and ADA posted gains of 5.3% and 3.3%, respectively.
Among meme tokens, DOGE saw a 1.4% decrease.
Market attention is now focused on upcoming U.S. interest rate cues, with the Federal Reserve’s late-July meeting minutes due for release later on Wednesday. The Fed had struck a dovish tone during that meeting.
Additionally, Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium on Friday is expected to provide further insight into interest rate trends, amid growing expectations of a potential rate cut in September.
