Bitcoin (BTC) Price Plunged 5.5% as Mt. Gox Distributes 47,000 BTC

Bitcoin (BTC) price plunged 5.5% between July 31 and Aug. 1, reaching its lowest level in over two weeks at $62,498.

Bitcoin (BTC) price plunged 5.5% on Aug. 1, reaching its lowest level in over two weeks at $62,498. Investors reacted strongly to the news, especially considering that BTC price had been trading above the $65,000 mark for most of the past week.

The last time Bitcoin price dropped below $63,000 was on July 17, kicking off a two-day rally that saw BTC price briefly cross the $67,000 resistance level. However, the flagship digital asset was unable to sustain the momentum and closed the month at $63,466.

Bitcoin price dropped sharply on Aug. 1 after trading above the $65,000 mark for most of the past week. Investors reacted strongly to the news, especially considering that BTC price had been trading above the $65,000 mark for most of the past week.

Several factors may have contributed to the recent downturn in Bitcoin price. Firstly, investors appeared to be downbeat about the prospects of an interest rate cut in the United States. The Federal Open Market Committee announced its decision to leave interest rates unchanged at 5.25% on July 31, largely in line with market expectations.

However, Fed Chair Jerome Powell's statement at the press conference following the announcement was notably more cautious than expected. Powell expressed confidence in the current rate of inflation reduction and said that the central bank would be closely monitoring upcoming economic data.

This statement led some investors to believe that the Federal Reserve may be slowing the pace of interest rate cuts, which could be impacting Bitcoin price. After all, the flagship digital asset has been rallying sharply since the beginning of 2023 largely due to the narrative that the Fed will be cutting interest rates later this year.

Secondly, the distribution of 47,000 BTC from the estate of defunct exchange Mt. Gox on July 30 sparked concerns about a potential sell-off. Those investors have been waiting for the payout for over a decade.

The Bitcoin was sent to the crypto exchanges Kraken and Bitstamp as part of the ongoing distribution of recovered funds. Those investors were initially given the option to receive their funds in either BTC or fiat currency. Those who opted to receive BTC will have their funds automatically transferred to a digital wallet.

However, those investors will be able to sell their BTC on crypto exchanges immediately after receiving the funds. This sparked concerns that a large number of investors may choose to sell their Bitcoin right away, putting downward pressure on the price.

Finally, traders are also keeping an eye on the upcoming quarterly results from tech giants, including Apple and Amazon, which are due on Aug. 1. These companies will serve as a gauge of whether the artificial intelligence hype can deliver on its promises in terms of earnings.

After rallying over 130% in 2023, BTC price has shown signs of slowing down in recent weeks. A retest of the $57,000 support level could be on the cards if Bitcoin fails to hold above the $62,000 level.

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