Bitcoin fell slightly on Friday and was set to post a middling weekly performance as crypto markets saw a lag in the recovery in equities on concerns over further token distributions by Mt Gox and an unclear regulatory outlook.
The cryptocurrency was down 0.1% at $58,238.5 by 01:46 ET (05:46 GMT), and was set to add about 1% this week. But the token has remained in a trading range of $50,000 to $60,000 for most of the year.
Bitcoin came under pressure as the dollar briefly rebounded on Thursday.
Bitcoin Lagging Stocks Recovery Despite Improved Sentiment
Cryptocurrency markets received little support from improving sentiment in risk-on markets amid easing fears of a U.S. recession and continued bets on interest rate cuts by the Federal Reserve.
Global stocks posted strong gains this week, with Wall Street indexes hitting two-week highs as the heightened volatility seen last week appears to be fading.
Strong U.S. retail sales data and more moderate inflation readings helped boost confidence in the U.S. economy and boosted bets for a 25 basis point interest rate cut in September.
While lower interest rates bode well for Bitcoin and cryptocurrencies, the sector has been under pressure due to reports that Mt Gox was planning to mobilize more Bitcoin to return to its customers after it was hacked in 2014.
A wallet linked to Mt Gox, which holds $2 billion worth of Bitcoin, was seen initiating test transactions this week, which usually heralds a sell event.
Uncertainty over the US presidential election has also been a factor in caution towards cryptocurrencies, with Kamala Harris and Donald Trump seen as neck and neck in the polls for the 2024 race. So far, only Trump has expressed a pro-crypto stance.
Data earlier this week also showed that traders pulled over $1 billion worth of USDT from crypto exchanges, which could herald a risk-off event.
Bitcoin ETFs also continued to see sustained outflows this week.
Cryptocurrency Price Today: Altcoins Drop
The broader crypto markets also tracked Bitcoin’s weakness, with sentiment towards the sector showing little sign of improvement.
The world’s No. 2 cryptocurrency fell 1.4% to $2,600.94, and was set to lose 0.4% this week — its fourth straight week of losses.
and moved in a flat to low range, while meme symbols fell by 0.9%.