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Bitcoin price today: rebounds to $58.5k as Mt Gox losses draw bargain buying

Published 10/07/2024, 04:06 pm
Updated 10/07/2024, 10:38 pm
© Reuters

Investing.com-- Bitcoin price rose higher on Wednesday, recovering further from recent losses as bargain hunters took advantage of recent price declines, although sentiment remained negative in the face of increased supply due to Mt Gox and the German government. 

World no.2 token Ether also advanced, extending a recent recovery as markets awaited a key decision from the Securities and Exchange Commission on a spot exchange-traded fund. 

Bitcoin rose 1.7% in the past 24 hours to $58,423 by 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 selling fears remain

The world’s largest currency benefited chiefly from bargain buying into recent price declines. Bargain hunters were seen stepping into markets since last week, with crypto investment products, such as Bitcoin ETFs, seeing capital inflows on this trend.

But sentiment towards crypto remained largely on edge, especially amid uncertainty of just how many tokens defunct crypto exchange Mt Gox will distribute as part of compensation for a 2014 hack.

Mt Gox was seen mobilizing about $9 billion of Bitcoin earlier this year- representing a sizeable chunk of current supply. A sale at that scale presents steep losses for Bitcoin’s price. 

Additionally, the German government was also seen offloading Bitcoin confiscated from a piracy website. Reports said the government held at least $2 billion worth of Bitcoin, and was steadily selling the token in the open market. 

Recent weakness in the dollar also offered some relief to Bitcoin, although the greenback steadied this week following testimony from Federal Reserve Chair Jerome Powell, where he gave no clear cues on plans to cut interest rates.

Focus is also on key consumer price index inflation data, due on Thursday.

Crypto price today: Ether gains on ETF hype, altcoins recover 

Broader crypto prices tracked Bitcoin’s recovery.

Ether climbed 0.7% to $3,105.34, extending a recent recovery as markets waited on the SEC to approve amended applications from issuers for a spot Ether ETF.

The ETF could be approved by as soon as mid-July and is expected to attract some measure of institutional capital into the world’s second-largest cryptocurrency.

Among other altcoins, Solana advanced 1.9%, also gaining on the prospect of a spot ETF, while XRP and Cardano added 1.1% and 2.7%, respectively.

Among memecoins, SHIB edged higher by 2%, while Dogecoin added 1%.

Bitcoin’s recovery likely to be short-lived, crypto research firm says

The ongoing upward trend in Bitcoin may continue for some time and potentially boost Bitcoin toward the $60,000 mark, however, the rally will likely be transitory, digital assets 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 anticipate no more than a short-term tactical bullish countertrend rally,” it wrote in a note seen by CoinDesk.

"We anticipate Bitcoin could rally back to nearly $60,000 before experiencing another decline to 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 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 amounts to a value of $4.3 billion to $6.8 billion at current prices.

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