Bitcoin slides a third straight day.... some thoughts:

Bitcoin experienced its third consecutive daily decline, nearing levels last seen in February. This drop is attributed to several factors, including US political uncertainties and potential sales by creditors of the defunct Mt. Gox exchange.

On Thursday, Bitcoin fell as much as 2.7% before recovering slightly to trade 1% lower at $58,880 as of 1:30 p.m. in Singapore. Other cryptocurrencies, such as Solana and Dogecoin, also saw declines.

Investors are evaluating scenarios regarding the possible withdrawal of 81-year-old President Joe Biden from the US reelection race. One outcome could be the emergence of a stronger Democratic candidate, potentially complicating the political landscape for Republican Donald Trump, whose policies have generally been favorable to the crypto industry.

In parallel, administrators of Mt. Gox are distributing over 137,000 Bitcoin to creditors in phases. Traders are uncertain about the extent of the $8 billion worth of Bitcoin that will be sold, along with potential sales of seized Bitcoin by the US and German governments.

“The likelihood of a stronger Democratic candidate replacing Biden who might not be pro-crypto is a factor,” said Richard Galvin, co-founder of hedge fund Digital Asset Capital Management. “A bigger reason in the short term for the Bitcoin weakness is the overhang from Mt. Gox, and government selling.”

Bitcoin miners, dealing with the financial impact of April’s halving which reduced their new token rewards, are responding by selling some of their Bitcoin inventory. “Bitcoin continues to battle with selling pressure from miners,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.

Market sentiment in the crypto space can shift rapidly. Weaker US economic data could prompt expectations of a more lenient Federal Reserve monetary policy, potentially boosting morale. Additionally, pending approvals for US exchange-traded funds investing in Ether might improve market sentiment.

The interpretation of US political developments might also evolve. Matt Hougan, Chief Investment Officer of Bitwise Asset Management Inc., suggested that changes at the top of the Democratic ticket could ultimately benefit the crypto sector, noting that Washington’s stance on digital assets has generally improved over the past year.

Speculators are closely monitoring Bitcoin charts to determine if key technical levels will hold or fall. Bitcoin recently closed below its six-month moving average price, a signal that could indicate further losses if historical trends hold true, according to data compiled by Bloomberg.

(all thoughts are private and no recommendation....to be continued)