Key Takeaways:
On Wednesday, July 3rd, the apex cryptocurrency fell by over 3% to change hands below $60,000 – its lowest valuation of the month. Bitcoin extended losses observed earlier in the week as traders remain concerned that distributions from the now-defunct crypto exchange Mt. Gox could trigger mass liquidation in the market.
BTC had been nursing steep losses throughout June and remained squarely within the trading range established in March when it hit a new all-time high. The overall sentiment towards cryptocurrencies remains negative amid uncertainty over the US Federal Reserve’s decision on dollar interest rates.
Traders Anticipate Mt. Gox Creditors To Liquidate Their Bitcoin Reimbursements
Traders are on the edge of their seats in anticipation of the BTC distribution by Mt. Gox to its creditors. The exchange’s liquidators announced last month that they will begin reimbursing clients who lost their Bitcoins to a hack that occurred over a decade ago by mid-July.
Earlier this year, Mt. Gox trustees revealed that the entity holds approximately $9 billion worth of BTC. However, it remains unclear just how much of the lot will be distributed to victims of the 2014 hack.
Experts for the most part speculate that receivers of the refund would be inclined to sell their share, given that Bitcoin’s value has gained massively over the past decade. Such a scenario would put immense selling pressure on BTC.
Mt. Gox isn’t the only entity preparing to offload their Bitcoin. Lately, the US and German governments have been dumping BTC confiscated from bad actors involved in illicit activities, which resulted in some whales selling their holdings this week.
Bitcoin’s Decline Affects Broader Crypto Market
However, the market’s sentiment towards the world’s largest cryptocurrency by market capitalization has been largely cooling down as it remained rangebound for over three months.
Furthermore, data shows that the trading volumes of spot Bitcoin exchange-traded funds (ETFs) have fallen drastically since the crypto asset recorded an all-time high of $73,700 back in March.
Bitcoin’s fallback didn’t spare the broader crypto market either. Ether (ETH), the second-largest cryptocurrency by market capitalization, dipped 4.5% on Wednesday to trade at $3,296.
The market’s sentiment towards the cryptocurrency powering the world’s largest smart contract-powered blockchain remains weak even after reports suggest that a spot Ethereum ETF could be approved by the US Securities and Exchange Commission (SEC) by next week.
Other popular cryptocurrencies like Ripple (XRP), Solana (SOL), and Cardano (ADA) fell between 1% and 5% each while leading memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) lost more than 4% of their value.
Cryptocurrencies saw little gains even after Federal Reserve chairman Jerome Powell flagged the central bank’s progress towards bringing down inflation in the US economy, which put pressure on the dollar, weakening its position.
However, Powell warned that the Fed would still need more time to consider whether to begin cutting interest rates on the greenback. His statements came ahead of the central bank’s meeting on Wednesday.
Standard Chartered Analyst Predicts BTC To Hit $100,000 Ahead of US Presidential Elections
Meanwhile, Standard Chartered analysts predict that Bitcoin could potentially hit a valuation of $100,000 per token ahead of the US presidential election.
Geoffrey Kendrick, the head of forex and digital assets research at Standard Chartered, was quoted as saying that Bitcoin could reach a new all-time high in August, followed by a surge to the $100,000 mark on election day.
The bank is basing its forecast on President Joe Biden staying in the presidential race, but the odds are in favor of a second Trump presidency come November. Analysts consider Trump to be a “Bitcoin positive” president and highlighted a positive correlation between his electoral odds and the price of BTC.
Standard Chartered also considered a “least Likely” scenario where Biden drops out of the presidential race in late July, in which case, Bitcoin’s price could drop to between $50,000 and $55,000.
Kendrick also added that a $150,000 price by the end of the year would see Bitcoin join the $3 trillion club in terms of market capitalization, following in the footsteps of chip manufacturer Nvidia, which hit the valuation this week.
At the time of writing, Bitcoin (BTC) is trading at $58,832 – down 3.66% over the last 24 hours.
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