Bitcoin (BTC) News Today: BTC Plummets Amid Mt. Gox and Fed Rate Speculations

US labor market data and rising bets on a September Fed rate cut failed to spur a Wednesday bitcoin (BTC) rally. Why?

Bitcoin Plunges Below $60,000 Amid Mt. Gox Repayment Fears: What’s Next for BTC?

On Wednesday, July 3, BTC slid by 3.04%. Following a 1.25% loss on Tuesday, July 2, BTC ended the session at $60,216.

Supply and demand dynamics likely adversely impacted bitcoin price trends since early June.

The Mt. Gox Effect

News of Mt. Gox planning to return around $9 billion in BTC to creditors could be a factor.

Mt. Gox collapsed in February 2014 after halting BTC withdrawals on February 7, 2014. Shortly after, the world’s largest bitcoin exchange (at that time) suspended all trading and filed for bankruptcy protection in Japan on February 28, 2014.

More than nine years later, Mt. Gox is preparing to return approximately 141,000 BTC to creditors. 141,000 BTC amounted to around $70 million at the time of the collapse. However, based on the current value of BTC, 141,000 BTC would be equivalent to approximately $8.5 billion.

The markets expect the creditors to offload most of the 141,000 BTC, fueling the latest pullback.

For context, the US BTC-spot ETF market saw total net inflows of $14.62 billion since launching on January 11.

Mt.Gox jitters overshadowed market-friendly US economic indicators from Wednesday. However, can a September Fed rate cut send BTC to a new all-time high?

US Economic Indicators and Fed Rate Speculations

On Wednesday, an upswing in continuing jobless claims and weaker-than-expected ADP numbers influenced investor bets on a September Fed rate cut.

Continuing jobless claims increased from 1,832k to 1,858k in the week ending June 22. Significantly, continuing jobless claims have trended higher since April 2024 and rose to the highest level since November 2021, signaling a weakening US labor market.

Furthermore, the ADP reported a 150k increase in employment in June compared with 157k in May. Economists expected a 160k rise. Notably, it was the lowest increase since January 2024.

Investors raised their expectations of a September Fed rate cut in response to the labor market data.

According to the CME FedWatch Tool, the probability of the Fed holding interest rates unchanged in September fell from 31.2% to 26.5% on Wednesday.

The shift in sentiment toward a September Fed rate cut was not enough to counter fears of a flood of Mt. Gox BTC hitting exchanges. A September Fed rate cut would likely leave a second rate cut on the table for 2024, significantly fewer than rate cut numbers anticipated earlier in the year.

The US BTC-spot ETF market also had a limited reaction to the crypto-friendly US economic indicators.

US BTC-Spot ETF Market Faces a Second Day of Net Outflows

On Tuesday, July 2, the US BTC-spot ETF market had total net outflows of $13.7 million. Significantly, the US BTC-spot ETF market ended a five-day inflow streak.

The US BTC-spot ETF market faces a second session of net outflows on Wednesday, July 3.

According to Farside Investors,

• Grayscale Bitcoin Trust (GBTC) had net outflows of $27.0 million after net outflows of $32.4 million on Tuesday.
• Fidelity Wise Origin Bitcoin Fund (FBTC) reported net inflows of $6.5 million following inflows of $5.4 million on Tuesday.
• Excluding flow data for iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market saw total net outflows of $20.5 million.

There are no US economic indicators on Thursday, July 4. The US markets are closed for the Fourth of July holidays. Mt. Gox chatter and sentiment toward the Fed rate path will likely be focal points, with recent US BTC-spot ETF market flow trends also needing consideration.

Investors should track the news wires, real-time US data, and expert commentary to manage trading strategies accordingly. Stay informed with our latest updates and insights to navigate the crypto market effectively.

Technical Analysis

Bitcoin Analysis

BTC remained below the 50-day EMA but held above the 200-day EMA. The EMAs send the bearish near-term signals but bullish longer-term signals.

A BTC move through the $64,000 resistance level could give the bulls a run at the 50-day EMA. A break above the 50-day EMA could signal a move toward the $69,000 resistance level.

Market sentiment toward the Fed rate path and supply-demand dynamics need consideration.

On the other hand, a break below the $60,365 support level could give the bears a run at the 200-day EMA.

With a 36.78 14-Daily RSI reading, BTC could break below the 200-day EMA before entering oversold territory.

Ethereum Analysis

ETH sat below the 50-day EMA while remaining above the 200-day EMA. The EMAs affirmed the bearish near-term but bullish longer-term price signals.

A break above the 50-day EMA and the $3,480 resistance level could signal a move to the $3,600 handle. Selling pressure could increase at the $3,480 resistance level. The 50-day EMA is confluent with the resistance level.

US ETH-spot ETF-related chatter needs consideration.

Conversely, an ETH drop below the $3,244 support level could give the bears a run at the 200-day EMA and the $3,033 support level.

The 14-period Daily RSI reading, 38.93, suggests an ETH drop below the $3,244 support level before entering oversold territory.