Investing.com-- Bitcoin price fell sharply to a two-month low on Thursday, breaking past a key support level as uncertainty over several points of selling pressure, chiefly defunct exchange Mt Gox, saw traders remain averse towards the token.
The world’s biggest cryptocurrency took little support from weakness in the dollar, which fell amid increased bets on interest rate cuts by the Federal Reserve. Broader crypto prices also followed Bitcoin lower.
At 06:00 ET (10:00 GMT), Bitcoin fell 5% to $57,722.0, just above the session's low of $57,053.
Mt Gox, dumping fears batter Bitcoin
Bitcoin has been nursing steep losses over the past week as traders positioned for a potential mass sale event, stemming largely from defunct crypto exchange Mt Gox.
The liquidators of the exchange said they will begin returning Bitcoin stolen during a 2014 hack to clients from early July. While the scale of the distribution remained unclear, traders bet that given Bitcoin’s massive price appreciation in the past decade, most receivers of the token would be inclined to sell.
Such a scenario presents a large amount of selling pressure on Bitcoin. Several major whales were seen mobilizing Bitcoin on exchanges for a sale, while the token was also pressured by reported selling of confiscated tokens by the German government.
Fears of a mass sale saw traders turn largely averse towards the world’s biggest cryptocurrency. This selling pressure spilled over into broader crypto markets, even as recent data showed some improvement in capital flows into crypto.
Bitcoin market "remarkably robust"
However, despite these losses, new analysis from Glassnode suggests the Bitcoin market remains remarkably robust. According to the on-chain analytics platform, aggregate investor profitability is still strong, with the average coin holding a 2x profit multiple.
Glassnode’s analysis reveals that the average coin in profit holds an unrealized gain of $41,300, with a cost basis of approximately $19,400, while the average coin in loss holds an unrealized loss of $5,300, with a cost basis of around $66,100. This divergence highlights potential sell-pressure points as investors weigh realizing gains against mitigating losses.
The average cost basis per active investor remains around $50,000, Glassnode said, a key level the market needs to stay above to maintain the macro bull market.
Crypto price today: Altcoins tumble, rate optimism provides little support
Broader crypto prices also retreated on Thursday and have also suffered over the past week.
World no.2 token Ether fell 5.4% to $3,161.49 as traders largely disregarded recent speculation over a spot Ether exchange-traded fund. Ether touched an over one-month low, having largely wiped out gains made in May on hype over a spot ETF.
XRP, SOL and ADA slid between 4% to 8%, while among meme coins, SHIB and DOGE shed around 8% each.
Crypto prices took little support from weakness in the dollar, which fell as a swathe of weak labor market and business activity readings pushed up expectations of interest rate cuts by the Fed.
Hawkish signals from the minutes of the Fed’s June meeting somewhat tempered this optimism, while several Fed officials also sounded caution over interest rate cuts.
Focus was now on key nonfarm payrolls data due on Friday, which is set to offer more definitive cues on the labor market.
(Ambar Warrick contributed to this article.)