Bitcoin showed signs of recovery on Monday, offsetting recent losses amidst prevailing negative sentiment across crypto markets.
Investors remained cautious amid looming concerns of a significant liquidation event as defunct exchange Mt Gox prepares to distribute stolen tokens starting this week. The prospect of these tokens flooding the market added to selling pressures, impacting Bitcoin‘s valuation, which rose 4% in the past 24 hours to $63,259.0 as of 00:57 ET (04:57 GMT). The cryptocurrency also benefited from a weakened dollar, which declined 0.2% on Monday.
The distribution of Bitcoin stolen in a 2014 hack by Mt Gox liquidators is anticipated to commence in early July. Traders speculated that recipients of these tokens may opt to sell, influenced by Bitcoin’s substantial valuation increase over the past decade, potentially triggering significant price declines as observed in late June.
Amid these developments, crypto investment products recorded consecutive weeks of outflows, reflecting apprehensions about potential Bitcoin sell-offs. Meanwhile, altcoin prices rebounded on Monday, recuperating from steep losses incurred in June. Ethereum, the second-largest cryptocurrency by market capitalization, surged 3.7% to $3,490.79, buoyed by speculation surrounding the approval of a spot Ether exchange-traded fund by the Securities and Exchange Commission this week.
Other altcoins such as SOL, XRP, and ADA also saw gains ranging from 1.5% to 8%, albeit with subdued trading volumes. Meme tokens like DOGE and SHIB registered over 4% increases in value.
Despite these recoveries, investor sentiment towards cryptocurrencies remained cautious ahead of forthcoming signals on U.S. interest rates. Federal Reserve Chair Jerome Powell’s upcoming speech and the release of minutes from the Fed’s June meeting are anticipated to provide clarity on future rate adjustments. Additionally, the release of nonfarm payrolls data later in the week is expected to influence market sentiment further, with traders increasingly betting on a 25 basis points rate cut by the Fed in September, which could lend support to crypto markets.
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