Bitcoin Price Slides Amid Mt Gox Distribution Fears and Rate Jitters

Bitcoin price slid lower on Wednesday, extending losses seen earlier in the week as traders remained largely averse to the token amid concerns that distributions from the defunct exchange Mt Gox will spark a mass sales of the token.

Sentiment towards broader crypto markets also remained dour amid uncertainty over U.S. interest rates, with a recent drop in the dollar doing little to deter weakness in the sector. Bitcoin fell 4% in the past 24 hours to $60,339.1 by 08:20 ET (12:20 GMT). The world’s biggest cryptocurrency was nursing steep losses through June and remained squarely within a trading range established since March.

Traders were largely on edge in anticipation of distributions by Mt Gox. Liquidators of the exchange signaled that they will begin returning Bitcoin stolen during a 2014 hack to clients by early-July. The exchange was seen mobilizing about $9 billion worth of Bitcoin earlier this year, although it remained unclear just how much the planned distributions will entail.

Traders speculated that receivers of the tokens would be largely inclined to selling them, given that Bitcoin saw massive price gains over the past decade. Such a scenario presents extended selling pressure on Bitcoin. Speculation over dumping activities by other entities also weighed on Bitcoin. The German government was seen offloading Bitcoin recovered from a piracy website, while some whales were also seen mobilizing Bitcoin this week.

But even before fears of Mt Gox began battering Bitcoin prices, sentiment towards crypto was seen largely cooling as the token remained rangebound for over three months. Capital flows data showed trading volumes of crypto exchange-traded funds, particularly Bitcoin, fell drastically in recent months.

Broader crypto prices retreated, taking little support from an overnight decline in the dollar. Ethereum dipped 4.5% to $3,296.01, with sentiment towards the token remaining weak even as reports suggest a spot Ether ETF could be approved by this week. Dogecoin, Cardano, and Solana fell between 1% and 4.5%, while meme tokens Shiba Inu and Dogecoin lost more than 4% each.

Crypto saw little gains even as Federal Reserve Chair Jerome Powell flagged progress towards bringing down inflation, which weighed on the dollar. But Powell warned that the Fed still needed more confidence to begin cutting interest rates. His comments came ahead of more key cues on U.S. interest rates. The minutes of the Fed’s June meeting are due on Wednesday, while several Fed officials are also set to speak. Beyond the Fed, jobs data is due on Friday.

In a more positive outlook, Standard Chartered analysts predicted that Bitcoin’s price could reach a new all-time high in August, followed by a surge to $100,000 by the U.S. presidential election in November. The bank’s forecast depends on Joe Biden staying in the presidential race, with analysts highlighting a positive correlation between Trump’s electoral odds and the price of bitcoin. They consider Trump to be “bitcoin-positive” and suggest that regulation and mining would be looked at more favorably under his administration.