According to the Wisdom Finance app, Bitcoin has been falling for the third consecutive trading day, with prices close to their February levels. The reasons include political unrest in the United States and the possibility of creditors of the bankrupt Mt. Gox exchange selling off their assets.
On Thursday, the largest cryptocurrency, Bitcoin, fell 2.7%, before narrowing its decline to 1%, to $58,880. Smaller tokens like Solana and Dogecoin also fell.
Global investors are all concerned about the potential risks of US President Joe Biden giving up his re-election bid. One possibility is that a stronger Democratic candidate will emerge to compete fiercely with Republican Donald Trump. Trump's agenda is seen as favorable to the crypto industry.
Meanwhile, Mt. Gox managers are gradually returning more than 137,000 bitcoins to creditors. Traders are weighing the scale of Mt. Gox creditors' final sale of bitcoins. It is understood that since 2011, the cryptocurrency exchange Mt. Gox has been targeted by hackers, resulting in the theft of more than 600,000 bitcoins and bankruptcy in 2014. In late June, the team responsible for managing Mt. Gox's remaining funds announced that they would begin repaying cryptocurrency to creditors who lost their assets more than a decade ago, in the form of Bitcoin and Bitcoin Cash payments. In addition, the disposal of confiscated bitcoins by the German and US governments has raised concerns about a massive sell-off.
Richard Galvin, co-founder of hedge fund Digital Asset Capital Management, said, "One factor is that a stronger Democratic candidate could replace Biden, who may not support cryptocurrencies. In the short term, a bigger reason for Bitcoin weakness is pressure from Mt. Gox and government sell-offs."
Bitcoin miners continue to weather the financial impact of the so-called halving in April, which limited their supply of new tokens earned through work. One of these miners' responses is to sell off part of their token inventories.
"Crypto is Macro Now" author Noelle Acheson said, "Bitcoin continues to struggle with selling pressure from miners."
The sentiment in the cryptocurrency market could quickly change, for example, if US economic data weakens, which would stimulate investors to bet on the Federal Reserve's easing of monetary policy. ETFs that directly invest in the second-largest token, Ethereum, are expected to soon receive regulatory approval in the United States, which could also boost market sentiment.
Interpretations of US political developments may also change. Bitwise Asset Management Chief Investment Officer Matt Hougan believes that a potential replacement on the Democratic candidate list is "more likely to solve the crypto issue better." He said that over the past year, Washington's attitude towards digital assets has generally improved.
Speculators are carefully studying the technical charts of Bitcoin, with the token's closing price slightly below the six-month moving average price. Data compiled by Bloomberg shows that if history is any guide, this breakout signals further decline.