Bitcoin has fallen for the third day in a row, approaching its lowest value since February. This drop is due to uncertainty in US politics and fear that creditors of the defunct Mt. Gox exchange could sell their Bitcoin. On Thursday, Bitcoin fell as much as 2.7% before recovering slightly to a 1% loss, trading at $58,875 at midday in Singapore. Other cryptocurrencies such as Solana and Dogecoin also fell.
Investors are worried about President Joe Biden’s political future. If Biden decides not to run for reelection, a stronger Democratic candidate could challenge former President Donald Trump, who supports the cryptocurrency industry.
At the same time, Mt. Gox administrators are returning more than 137,000 Bitcoin to creditors. The market is nervous about how much of this $8 billion in Bitcoin could be sold, along with concerns that the US and German governments will sell seized Bitcoin.
“A stronger Democratic candidate who might not support cryptocurrencies is a cause for concern,” said Richard Galvin, co-founder of Digital Asset Capital Management. “But the biggest problem for Bitcoin right now is the possible sale by Mt. Gox creditors and the government.”
Challenges for Bitcoin miners
Bitcoin miners, who use a lot of energy to keep the network running, are still dealing with the financial impact of the April halving event, which reduced the number of new Bitcoin they receive as rewards. Because of this, some miners are selling parts of their Bitcoin holdings.
“Bitcoin continues to face selling pressure from miners,” said Noelle Acheson, author of the Crypto Is Macro Now newsletter.
Sentiment about cryptocurrencies can change quickly. Weak US economic data could raise expectations of looser policies from the Federal Reserve, which could boost the market. The possible approval of US exchange-traded funds (ETFs) for Ether could also improve the overall mood.
Political events in the United States are also closely followed. Matt Hougan, chief investment officer at Bitwise Asset Management Inc., suggested that a new Democratic candidate could be good for the crypto sector. He noted that Washington’s attitude toward digital assets has become more favorable over the past year.
Traders are watching Bitcoin charts to see if important technical levels hold. Recently, Bitcoin fell below its six-month moving average, historically indicating further losses.
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