Bitcoin
recovers to $58.5K as Mt Gox losses attract bargain buying By Investing.com
Investing.com– Bitcoin’s price rose on Wednesday, further recovering from recent losses as bargain hunters took advantage of recent price drops, although sentiment remained negative amid increased supply due to Mt Gox and the German government.
The world’s No. 2 token Ether also advanced, extending a recent rally as markets awaited a key Securities and Exchange Commission decision on a cash exchange-traded fund.
rose 1.7% over the past 24 hours to $58,423 as of 08:31 ET (12:31 GMT). The crypto asset crossed the $59,000 threshold at one point before paring some gains.
Bitcoin benefits from bargain buying, but sell-off fears remain
The world’s largest currency has benefited primarily from bargain-buying in recent price declines. Bargain hunters have been seen entering the markets since last week, with cryptocurrency investment products such as Bitcoin ETFs seeing capital inflows in the wake of the trend.
But sentiment towards cryptocurrencies remained quite tense, especially amid uncertainty over how many tokens the now-defunct cryptocurrency exchange Mt Gox will distribute as part of compensation for a 2014 hack.
Mt Gox was seen mobilizing around $9 billion worth of Bitcoin earlier this year – representing a sizeable chunk of the current supply. A sell-off on this scale presents steep losses for the Bitcoin price.
Additionally, the German government was also seen offloading confiscated Bitcoin from a piracy website. Reports said that the government held at least $2 billion worth of Bitcoin and was constantly selling the token on the open market.
The dollar’s recent weakness has also offered some relief to Bitcoin, although the US currency has stabilized this week following testimony from Federal Reserve Chairman Jerome Powell, who gave no clear indication of plans to cut interest rates.
The focus is also on key inflation data, which will be released on Thursday.
Cryptocurrency Price Today: Ether Gains on ETF Hype, Altcoins Recover
Broader cryptocurrency prices followed Bitcoin’s recovery.
rose 0.7% to $3,105.34, extending a recent rally as markets waited for the SEC to approve issuers’ amended applications for a spot Ether ETF.
The ETF could be approved as early as mid-July and is expected to attract some institutional capital to the world’s second-largest cryptocurrency.
Among other altcoins, it advanced 1.9%, also gaining on the prospect of a spot ETF, while and added 1.1% and 2.7%, respectively.
Among memecoins, it rose 2%, while it added 1%.
Bitcoin’s recovery likely to be short-lived, says crypto research firm
Bitcoin’s ongoing uptrend could continue for some time and potentially propel Bitcoin towards the $60,000 mark. However, the rally is likely to be transitory, digital asset research firm 10x Research said.
“The $55,000-$56,000 range is forming a base from a technical analysis perspective. However, given the medium-term technical damage, we do not anticipate more than a short-term tactical bullish countertrend rally,” he wrote in a note seen by CoinDesk.
“We anticipate Bitcoin could recover to near $60,000 before experiencing another decline into the low $50,000 range, creating a complex trading environment.”
Furthermore, analysts at K33 Research pointed out that seasonal trends are not favorable for Bitcoin, with the third quarter historically showing the weakest returns.
According to K33’s estimates, the market will need to absorb between 75,000 and 118,000 BTC in sales from Saxony and Mt. Gox customers over the summer, which equates to a value of $4.3 billion to $6.8 billion at current prices.