Bitcoin traders risk-off as BTC price falls to $62K Is a generational bottom approaching?
Bitcoin traders anticipate a potential price drop below $60,000. Will dip buyers show up?
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Bitcoin traders anticipate a potential price drop below $60,000. Will dip buyers show up?
A flash crash in Bitcoin price on shorter timeframes induces panic among leveraged long traders, but analysts believe its a short-term pullback.
Repeated Bitcoin transfers to centralized exchanges suggest the German government plans to sell the remaining $1.3 billion in BTC holdings.
In the last four days, the Bitcoin price has plummeted over 15%, with a significant 7.8% drop occurring in just the past 24 hours. From a high of nearly $72,000 in early June, the price of BTC has now declined by almost 25%. Here are the key factors behind yesterday’s dramatic fall in price. #1 Mt. Goxs Bitcoin Repayments The impending distribution of 142,000 BTC by the defunct crypto exchange Mt. Gox has significantly stirred market anxiety. This amount, representing 0.68% of the total Bitcoin supply, is slated for distribution among the creditors of the exchange, which ceased operations in 2014 due to a major hacking event. The distribution process has already seen large transfers, with 52,633 BTC moved in recent hours, suggesting that preparations are underway for a large-scale disbursement. Market observers and analysts are closely monitoring these movements, as the potential for massive selling by these creditors could inject considerable volatility into the market. The psychological impact of this distribution has presumably led to preemptive selling among Bitcoin holders, further amplifying market jitters. #2 German Government The German government’s decision to begin liquidating its Bitcoin holdings has sent ripples through the market as well, with transactions recorded on major exchanges such as Bitstamp, Coinbase, and Kraken. Related Reading: Bitcoin Price Could Massively Crash Like In May 2021, Warns Fund Manager Over a fortnight, the government reduced its holdings from 50,000 BTC to 42,274 BTC. Market participants are understandably nervous that a continuous sell-off by a major holder like a government could lead to downward price pressure. #3 Massive Long Liquidations The Bitcoin market has experienced a sharp increase in the liquidation of long positions, with a record $212 million worth of BTC liquidated just in the past 48 hours. This liquidation is the most significant since April 13, when $261 million worth of BTC longs were liquidated, leading to a steep decline in Bitcoins price from $68,500 to $61,600. Such liquidations often trigger a chain reaction, leading to forced sell-offs and further price declines. These liquidations are indicative of a highly leveraged market where investors might be overextended, contributing to heightened market volatility. #4 BTC Miner Capitulation Post the Bitcoin halving event on April 20, 2024, the mining reward was halved from 6.25 to 3.125 BTC, escalating economic pressures on miners. This reward reduction was anticipated to increase Bitcoins price, but the increase did not materialize, leaving miners with diminishing returns. Related Reading: Glassnode: Bitcoin $110,000 Target Holds, Breaking These Key Levels Crucial To Avoid Crash The current capitulation among miners is akin to previous market bottoms, such as the one seen following the FTX collapse, researchers from CryptoQuant recently revealed. Indicators of miner distress, including a significant 7.7% drop in hashrate and a plummet in mining revenue per hash to near all-time lows, means that many miners were forced to turn off their equipment and sell the BTC stash. #5 Slowdown In US Spot Bitcoin ETF Activity Contrary to expectations of a buoyant market driven by institutional investments through spot Bitcoin ETFs, there has been a noticeable slowdown in this sector. The anticipated “second wave” of institutional money has failed to materialize thus far, leading to subdued activity in the ETF space. Instead, the spot ETFs are currently experiencing a summer lull. The enthusiasm surrounding Bitcoin ETFs has been unable to counteract the overwhelmingly negative market sentiment; however, its direct impact remains relatively minor. Leading on-chain analyst James Checkmate Check recently estimated that only 20% of the spot volume is attributable to spot ETFs, with the remainder stemming from traditional spot markets. Over recent weeks, long-term BTC holders have been selling off their holdings in significant numbers, which has been the primary driver of the downward pressure on the market. At press time, BTC traded at $54,434. Featured image created with DALL·E, chart from TradingView.com
The Bitcoin price has fallen to a low of $59,604 today, marking a 4% decrease. According to several renowned crypto analysts, this movement was largely driven by the phenomenon known as the CME gap, a concept critical in Bitcoin futures trading at the Chicago Mercantile Exchange (CME). Why Is Bitcoin Down Today? A “CME gap” is a term used to describe the price gap that emerges on the Bitcoin CME futures chart. Unlike Bitcoins spot markets that operate 24/7, the CME Bitcoin futures market only trades five days a week, closing over the weekend and on holidays. This difference in trading hours can result in a price discrepancy between the last traded price on Friday and the market’s opening on Monday. Today’s Bitcoin price action can probably be directly linked to the closure of such a gap. Over the weekend, a noticeable gap formed. Daan Crypto Trades (@DaanCrypto), a prominent trader and analyst, confirmed this via X, explaining, “Bitcoin closed most of the gap that was created during this weekend. On Monday it also closed the gap that was created a week ago and topped out right at that point. [..] The gap has now been fully closed. No major gaps in nearby proximity as we speak.” Related Reading: Fundstrats Head Of Research Says Bitcoin Will Reach $150,000, Heres When Other market participants echoed this sentiment. Titan of Crypto (@Washigorira) indicated the bullish potential post-gap closure, stating on X, Bitcoin CME Futures GAP got filled! As expected. Nothing holds BTC back now. Time to send. This view suggests that filling the gap could remove resistance for Bitcoins price, potentially leading to an uptick. Crypto analyst Ninja (@Ninjascalp) confirmed, “this was just a CME gap fill guys […] its bullish selling. Its all going to be okey. Don’t panic.” Another analyst commented “For anyone questioning whos running the BTC market in the short term, its market makers! There was no way they were going to leave a $1,650 CME gap from the weekend.” What To Expect Now? Marco Johanning offered a more nuanced take, emphasizing the precarious nature of the current price level. His commentary via X highlighted both potential and risk. Related Reading: Bitcoin Bull Run Tied To Economic Echoes Of The 1930s-1970: Arthur Hayes Main scenario: Bitcoin has lost the trendline and closed the CME gap. The price is sitting on a local support, from which it can now pump. That would be a typical mid-week reversal with the liquidity behind the equal highs at 63.8k as the main target. However, the current level is also fragile. If the support is lost, we could see another 1k-2k drop. I can hardly wait for Bitcoin to finally leave this exhausting time capitulation range,” Johanning stated. The analysts from Alpha dj (@alphadojo_net) provided an in-depth analysis, dissecting the day’s price movement and potential future trends. Their report highlighted the critical levels that traders are watching: “The analysis is quite simple: BTC needs to bounce here, or if it loses the $60k level, much lower prices are likely. As long as we don’t break below $60k or above $63.5k, it’s best to take it slow and wait for a clearer direction.” They also noted a significant liquidity pool around the $60,000 mark which might act as a support, while pointing out that a strong selling presence above this level at $64,000 could cap upward movements. “In the order books, the sell side remains very strong, while the bid side fails to show any increase.” At press time, BTC traded at $60,388. Featured image created with DALL·E, chart from TradingView.com
Apprehension over a delay in interest rate cuts, a strengthening DXY and softness in Bitcoin price back the $584 million outflow in crypto investment products.
In the last 24 hours, the Bitcoin (BTC) price fell by up to 4.8%, plummeting to a new low of $60,601 after trading above $64,000 just a day earlier. This decline can be attributed to a combination of factors, including developments from the Mt. Gox saga, a significant liquidation of long positions, and ongoing miner capitulation. #1 Mt. Gox News Shakes Market Confidence The sudden and steep decline from $62,900 to $60,601 in Bitcoins price coincided closely with a new announcement from the trustees of the defunct Bitcoin exchange, Mt. Gox. This exchange, central to one of the earliest and largest Bitcoin thefts, declared it would start repaying victims using the stolen assets from a 2014 hack in July 2024. According to Nobuaki Kobayashi, the rehabilitation trustee, the repayment process will include Bitcoin (BTC) and Bitcoin Cash (BCH) and start in early July. The Rehabilitation Trustee has been preparing to make repayments in Bitcoin and Bitcoin Cash under the Rehabilitation Plan […] The repayments will be made from the beginning of July 2024, the announcement reads. Related Reading: Bitcoin Crash: Crypto Analyst Reveals Why Price Could Drop To $52,000 This news was perceived negatively by the market, primarily due to fears of oversupply from beneficiaries likely selling off assets that have massively appreciated since their initial investment period before 2013. In May 2023, the trustee moved over 140,000 BTC, worth approximately $9 billion. This transaction was significant as it was the first movement of these funds in five years, tracked closely by analysts and traders. Market reactions were immediate; Bitcoin prices tumbled as speculations about potential market flooding with these repaid coins took hold. #2 Record Liquidations Of Long Positions Adding to the downward pressure, there was a notable surge in the liquidation of long BTC positions. According to the latest data from Coinglass, a staggering $85.4 million worth of long positions were liquidated. This event marks the largest liquidation since April 30 and May 1, when over $195 million ($95 million and $100 million respectively) in longs were liquidated, correlating with a 12.5% price drop over those two days. Such liquidations occur when the market price reaches the liquidation price of leveraged positions, triggering automatic sell-offs to cover the losses, further driving the price down. This cascade effect contributes significantly to rapid price declines and increased market volatility. #3 Ongoing Miner Capitulation Adds To Sell Pressure The third critical factor affecting Bitcoins price is the ongoing miner capitulation. Miner capitulation refers to a situation where miners, particularly those operating with marginal efficiency, begin selling their mined BTC to cover operational costs due to unprofitability. This phase can exert substantial downward pressure on Bitcoin prices as it increases the supply of Bitcoin being sold in the market. Related Reading: Bitcoin Drops Below $64,000, But Arthur Hayes Advocates Buy The Dip As reported by NewsBTC, renowned crypto analyst Willy Woo and others have pointed out that miner capitulation is a crucial phase to monitor, especially following the Bitcoin halving events that reduce miner rewards by half, thereby straining their profitability. Woo noted recently that the recovery from such capitulations has historically been slow and tied closely to the resurgence in mining activity and hash rates. Crypto expert Jelle, speaking via X, highlighted the ongoing nature of this capitulation today, saying, “Hash Ribbons are showing that miner capitulation is ongoing — exactly what you want to see post-halving. Generally speaking, the market starts rallying once that capitulation phase comes to an end.” At press time, BTC traded at $61,241. Featured image from iStock, chart from TradingView.com
Bitcoins tumultuous week continues as data points to further downside in BTC price.
The Bitcoin price has fallen by 4.7% since peaking at $71,231 yesterday, now hovering around $66,967. This decline marks a notable return of volatility in the market, driven by several critical factors. #1 Federal Reserves FOMC Meeting Anticipation The Bitcoin market seems to be in a risk-off mode ahead of tomorrow’s Federal Open Market Committee (FOMC) meeting on Wednesday, June 12th. The market’s sensitivity to macroeconomic indicators is on full display as stakeholders await the US Federal Reserve’s decision on interest rates and its economic projections. Current expectations suggest that the Fed will maintain the interest rates at a range of 5.25%-5.50%, but the market is bracing for the updated dot plot which is projected to adopt a more hawkish stance. The adjustment anticipated involves reducing the expected rate cuts in 2024 from three to two, with some speculating about the possibility of only one cut. This hawkish tilt in monetary policy projections is poised to influence investor behavior significantly, as higher interest rates typically dampen the appeal of non-yielding assets like cryptocurrencies. Adding to the uncertainty, the May 2024 US Consumer Price Index (CPI) data is scheduled for release just hours before the FOMC’s announcement. The market has reacted strongly to US macroeconomic data in recent months, and any deviation from expectations could lead to substantial price fluctuations. Related Reading: FOMC Preview: How Will Bitcoin And Crypto React? All You Need To Know Crypto analyst Ted commented on X, noting the critical nature of this week’s events: “After last Friday’s strong employment data, markets have almost completely priced out a July rate cut. Powell could quickly change this on Wednesday, especially if CPI comes in soft. There’s an (off) chance for significant repricing this week, which could move BTC + crypto #2 Intensified Spot Selling Pressure The immediate catalyst for the recent price drop appears to be a surge in spot selling. Analysis from alpha dj reveals that heavy selling pressure was largely responsible for the slide down to a low of $67,000. The market dynamics observed during this period indicate a clear shift, with an increased volume of sell orders not met by sufficient buy orders to sustain the price level. This imbalance has led to a breach in what was previously considered a robust support zone around $68,000. Related Reading: Hedge Funds Heavily Betting For Bitcoin To Fall: Will This Strategy Fail? The analysts elaborated on the situation, “Volatility has made a comeback, with BTC dropping as much as 3.5% to a low of $67k since yesterday. This selloff was primarily driven by heavy spot selling pressure, which is quite negative. A major concern is the lack of liquidations while the selloff is happening. BTC is currently in a critical area; the daily structure has been broken. BTC needs to bounce here, or its very likely we’ll fall back to the lower $60ks. #3 Inflow Streak In Spot Bitcoin ETF Inflows Ends The investment dynamics within spot Bitcoin ETFs have also reflected the markets bearish turn. After 19 consecutive days of positive inflows, these funds experienced significant outflows totaling $64.9 million yesterday. Notable among these was the Grayscale Bitcoin Trust, which saw outflows of $39.5 million. In contrast, BlackRock registered smaller inflows of $6.3 million. The performance of other ETF providers showed considerable variation. Fidelity recorded outflows amounting to $3 million, while Bitwise registered inflows of $7.6 million. In contrast, Invesco experienced outflows of $20.5 million, and Valkyrie also reported outflows totaling $15.8 million. At press time, BTC traded at $66,967. Featured image created with DALL·E, chart from TradingView.com
Bitcoin price reversed course with a surprise 5% correction over the past few days, but analysts say it is a healthy pullback.
Bitcoin price shows signs of a recovery, but analysts are uncertain whether the strongest part of the correction has passed.
Bitcoin (BTC) has witnessed a significant drop, falling to $56,556 during Wednesday morning in Europe, marking the lowest point since late February. This downturn represents the sharpest monthly decline since November 2022, with BTC tumbling approximately 7.5% within the last 24 hours and breaching the previously stable $60,000 support late Tuesday. #1 Derisking Before Todays FOMC Meeting Anticipation and anxiety are high in financial circles as the Federal Open Market Committee (FOMC) is set to announce its interest rate decision later today. This event is crucial as the crypto market, notably Bitcoin, has grown increasingly reactive to macroeconomic signals. Recent data, reflecting a slowdown in GDP growth coupled with persistent inflation, has significantly reduced expectations of interest rate cuts by the Federal Reserve. “Bitcoin and other risk assets are currently feeling the pressure from a stagflationary environment, geopolitical tensions, and seasonal liquidity variations,” remarked Ted from TalkingMacro. Related Reading: If History Repeats, This Is How Bitcoin Price Will Perform In The Next 6 Months Initially, up to seven rate cuts were anticipated by the end of 2024, a sentiment that has shifted dramatically with the market now pricing in only one potential cut by December 2024. This shift comes amidst an environment where inflation data is trending upwards, challenging the Federal Reserve’s position and potentially leading to a more cautious approach from Jerome Powell, the Fed Chairman. “For the first time in recent memory, the market is calling the Fed’s bluff, quickly front-running the idea that the Fed may not cut at all in 2024,” noted Ted. #2 Cyclical Bitcoin Correction Phase Following an exceptional rally since the year’s start, the market is undergoing a natural correction phase. Prior to the price crash, Charles Edwards, founder of Capriole Investments, noted: “We are a day short of breaking the record set in 2011 for days without a meaningful dip [-25%],” emphasizing the extraordinary nature of Bitcoin’s recent performance. Scott Melker, known as “The Wolf Of All Streets,” highlighted technical indicators that suggested an impending correction. “Broke and retested range lows as resistance. […] My biggest concern I have been discussing for months [was] that RSI never made the trip to oversold. Almost there now, all lower time frames oversold. This is still ONLY A 23% correction, very shallow for a bull market and consistent with other corrections on this run. We are yet to see a 30-40% pull back during this bull market, like those of the past. $BTC Daily Broke and retested range lows as resistance. Nothing but air until around $52,000 on the chart. My biggest concern I have been discussing for months (in newsletter) is that RSI never made the trip to oversold. Almost there now, all lower time frames oversold. This pic.twitter.com/5YZTWipBo8 — The Wolf Of All Streets (@scottmelker) May 1, 2024 #3 Profit-Taking Traditional finance markets and seasoned investors are seizing the opportunity to take profits following substantial gains. “TradFi/Boomers are taking profits: CME Open Interest is decreasing rapidly, April 29th 135,6k coins, April 30th 123,9k coins, topped around 170.4k coins (March 20th), explained crypto analyst RunnerXBT. This trend confirms a broader profit-taking strategy post significant events like the ETF approval and the anticipation around the Bitcoin halving. “That […] confirms my thesis that a lot of these guys longed in October 2023 because of ETF approval and BTC halving, trade played out and now they are taking profits (yes they are still up a lot), because they longed BTC not dead altcoins. TradFi/Boomers are taking profits CME Open Interest is decreasing rapidlyApril 29th 135,6k coinsApril 30th 123,9k coins Topped around 170.4k coins (March 20th) That at least for me confirms my thesis that a lot of these guys longed in October 2023 because of ETF approval pic.twitter.com/M8KY1NfCtK — RunnerXBT (@RunnerXBT) May 1, 2024 #4 US ETF Flows And Hong Kong Disappointment The dynamics surrounding spot Bitcoin ETFs have shown significant strains, evidenced by recent activities in both US and Hong Kong markets. In the United States, Bitcoin exchange-traded funds (ETFs) faced substantial outflows, indicating a cooling investor sentiment. Related Reading: USDT Dominance Falling, Analyst Predicts Bitcoin To Reach $80,000 According to recent data, the total outflows from US spot Bitcoin ETFs amounted to $161.6 million. Notably, the Grayscale Bitcoin Trust (GBTC) experienced outflows of $93.2 million, while Fidelity and Bitwise registered outflows of $35.3 million and $34.3 million, respectively. BlackRock had zero net flows once again. These numbers suggest a retreat in institutional interest, which has traditionally been a bulwark against price volatility. Parallel to the US, the debut of Bitcoin ETFs in Hong Kong also faltered significantly below expectations. Six newly launched ETFs, intended to capture both Bitcoin and Ethereum markets, collectively reached just $11 million in trading volume, starkly underperforming against the anticipated $100 million. The spot Bitcoin ETFs accounted for $8.5 million in trading volume. This was markedly lower than the launch day volumes of US-based spot Bitcoin ETFs, which had reached $655 million on their first day. #5 Long Liquidations The market has also been impacted by substantial long liquidations, with a total of $451.28 million liquidated in the last 24 hours alone. The largest single liquidation was an ETH-USDT-SWAP on OKX valued at $6.07 million, but Bitcoin-specific liquidations were significant as well, totaling $143.04 million, according to data from CoinGlass. These liquidations have amplified the selling pressure on Bitcoin. At press time, BTC traded at $57,715. Featured image from iStock, chart from TradingView.com
The Bitcoin price plunged by 7.2%from $88,526 to $82,150within the span of four hours following the reciprocal tariff announcement by US President Donald Trump on Wednesday. The precipitous drop aligns with a broader market rout set off by what has been described as one of the largest tariff packages in modern US history. Bitcoin Crashes After Trumps Tariff Bombshell On Wednesday afternoon, markets were jolted by a sweeping set of reciprocal tariffs that President Trump claimed would be levied on 185 countries all at once. The news sent ripples across global finance, with the S&P 500 futures market reportedly shedding $2 trillion of market capitalization in under 15 minutes. According to The Kobeissi Letter (via X): Reciprocal tariffs are officially HERE: President Trump just announced tariffs on 185 countries AT ONCE, one of the largest tariffs in US history. S&P 500 futures erased -$2 TRILLION of market cap in under 15 minutes. Related Reading: Bitcoins Fate Hinges on This Critical Dead Cross Signal Whats Next for BTC? The initial press coverage noted a 10% baseline tariff. However, as Trump spoke, the schemes complexity and scope became more apparent. He clarified that tariffs would be reciprocal but set to half of whatever rate another country currently imposes on US goodsa figure well beyond the 10% baseline in many cases. China, for instance, reportedly applies 67% tariffs on certain imports from the United States, suggesting a 34% tariff reciprocally aimed at Chinese imports. Meanwhile, the European Union could face a 20% tariff. This is VASTLY different than a 10% tariff across the board, The Kobeissi Letter pointed out, adding that these significantly higher rates created massive volatility. At one point in Trumps announcement, the S&P 500 futures reversed from being up 2% to dropping 4%an abrupt 6-percentage-point swing in under 20 minutes. By the time the Make America Wealthy Again Event concluded, the markets had sustained those losses, with Nasdaq 100 futures indicating a potential 500-point decline from prior levels. Bitcoin, which was up 8.9% since Monday morning, instantly experienced the same turmoil, shedding 7.2% of its value. Julio Moreno, Head of Research at CryptoQuant, remarked via X: I hope Bitcoiners learn that Trumps tariffs are a net negative for Bitcoin and the US economy. Related Reading: Is The Bitcoin Bull Run Over? Watch This Key Price He further elaborated: Trump has introduced too much uncertainty to the world economy with his tariffs. Theres a high enough chance of recession if the tariffs last long enough. This of course has hit Bitcoin and crypto prices in spite of a positive regulatory environment and [the Strategic Bitcoin Reserve]. Economic Projections While the precise long-term effects remain unclear, several prominent institutions have already issued forecasts. JPMorgan analysts warn: On a static basis, todays announcement would raise just under $400 billion in revenue, or about 1.3% of GDP, which would be the largest tax increase since the Revenue Act of 1968. We estimate that todays announced measures could boost PCE prices by 11.5% this year… This impact alone could take the economy perilously close to slipping into recession. And this is before accounting for the additional hits to gross exports and to investment spending. Simultaneously, The Kobeissi Letter noted that the average US tariff rateonce the new set of duties is enforcedcould exceed levels not seen since World War II. They cautioned that the White Houses targeted tariff revenue of $600 billion per year may be optimistic, suggesting only half that amount might materialize based on current data. Additional exemptionssuch as copper, pharmaceuticals, semiconductors, and lumberamplified the confusion, indicating that the tariffs will vary widely by sector and country of origin. UBS, as quoted by The Kobeissi Letter, also raised the alarm about inflation: BREAKING: UBS says a permanent implementation of President Trumps reciprocal tariffs would result in inflation rising to 5%. This would be a result of prices rising to adjust to the higher costs of imports. We are on the verge of 5% inflation and negative GDP growth. Although President Trump hinted at forthcoming largest tax cuts in American history, markets did not bounce back on that news. He specified that Medicare, Medicaid, and Social Security benefits would be spared from cuts, but investors and analysts appeared more focused on the immediate shock from the tariff package. At press time, BTC recovered to $83,207. Featured image created with DALL.E, chart from TradingView.com
Concerns over rising inflation and flat spot Bitcoin ETF inflows could be factors in the $435 million outflow from crypto investment funds last week.
Today’s Bitcoin price movement is a confluence of factors including massive liquidations, macroeconomic pressures, and the impact of negative Coinbase Premium alongside Bitcoin ETF dynamics. These elements combined have led to a noticeable dip in Bitcoin’s price. #1 Long Liquidations Today’s Bitcoin market saw a significant price drop, initiated by a sweeping liquidation event on the futures market. Over the last 24 hours, crypto trader liquidations exceeded $682.54 million across more than 191,000 traders, according to Coinglass data. This surge in liquidations resulted in Bitcoin’s price plummeting by 8% in mere hours, falling from $72,000 to $66,500. Although there was a minor recovery, with Bitcoin’s price rebounding to the $68,000 level, it currently stands nearly 10% below its March 14 all-time high of $73,737. Related Reading: Crypto Markets Monster Cycle: $7.5 Trillion Market Value By 2025, Bitcoin Targets $150,000 A notable 80% of these liquidations were long positions, contributing to $544.99 million of the total. Short position liquidations made up the remaining $136.94 million, with Bitcoin longs alone accounting for $242.37 million in liquidations. #2 Macro Conditions Weighing On Bitcoin Price The macroeconomic landscape has placed additional pressure on Bitcoin’s value. Ted, a macro analyst known as @tedtalksmacro, highlighted on X the influence of macro conditions on the cryptocurrency market. He stated, “If BTC is digital gold, expect it to trade in lockstep with gold, however, with higher beta.” With the Federal Reserve’s meeting looming next week, macroeconomic factors are expected to take center stage temporarily. Yesterdays US Producer Price Index (PPI) data, showing a 0.6% increase in February and surpassing forecasts of 0.3 month-over-month, has caused a ripple effect with CPI recently also hotter than expected, leading to a rise in US bond yields. The benchmark 10-year rate saw an increase of 10 basis points to 4.29%, while two-year rates rose to 4.69% from 4.63%. These developments have led traders to adjust their expectations for the Federal Reserve’s interest rate policies in 2024. Related Reading: Brace For Impact: MicroStrategy Is Planning Another $500 Million Bitcoin Purchase Mohamed A. El-Erian, from Queens’ College, Cambridge University, Allianz, and Gramercy, remarked on the situation: “US government bond yields jumped today in reaction to yet another (slightly) hotter-than-expected inflation print (this time PPI).” This suggests a growing awareness of the challenges that persistent inflation poses to achieving the Fed’s 2% inflation target. #3 Negative Coinbase Premium / Quiet Bitcoin ETF Day The decline of Bitcoin below the $70,000 threshold is also attributed to the “Coinbase Premium” – the exchange which custodies the majority of all spot Bitcoin ETFs – dipping into negative territory for the first time since February 26, indicating a bearish sentiment from US markets. This phenomenon is likely a consequence of significant sales of Grayscale GBTC, while the spot ETF experienced relatively calm activity. Following a record $1 billion net inflow day for the spot ETF on March 12, inflows dropped to just $132.7 million recently, with Blackrock contributing the lion’s share at $345.4 million. Meanwhile, Fidelity and ARK saw minimal inflows of $13.7 million and $3.5 million respectively, after a previously strong week. GBTC outflows were reported at $257.1 million, aligning with average levels. Crypto analyst WhalePanda commented on the situation, noting that despite the reduced inflow, “$132.7 million is still 2 full days of mining rewards.” He suggests a potential rebound in the market, stating, “We’re just ranging now and overleveraged people getting margin called. I guess the next move up is for next week.” At press time, BTC traded at $67,916. Featured image created with DALL·E, chart from TradingView.com
Bitcoin traders stay wary over Binance “FUD” triggering overly bearish BTC price action.
The Bitcoin (BTC) price has experienced a significant downturn over the past 24 hours, falling below the critical $70,000 threshold. After reaching a peak of $73,620 on Tuesday, the cryptocurrency has declined by approximately 5.7%, hitting a low of $68,830 on Friday. Analysts point to several key factors behind this decline: #1 Risk-Off Sentiment Ahead of US Election The timing of Bitcoin’s price drop coincides with a narrowing lead for former President Donald Trump over Democratic candidate Vice President Kamala Harris in prediction markets such as Polymarket and Kalshi, where users bet on election outcomes. Bitcoin has been considered a “Trump hedge” due to the former president’s strong advocacy for the cryptocurrency sector. Donald Trump has proposed establishing a “strategic Bitcoin reserve” in the United States if re-elected. Speaking at the Bitcoin 2024 Conference, he outlined plans to retain all Bitcoin currently held or acquired by the US government as part of this reserve. This initiative is a core element of his campaign to strengthen the US as a leader, aiming to make the country the “crypto capital of the planet.” Related Reading: Can Bitcoin Hit $200,000 Only If The Dollar Falls? Bitwise CIO Answers Earlier in the week, when Trump’s lead over Harris was more substantial, Bitcoin neared its all-time high of $73,777. The shrinking of Trump’s lead appears to have prompted investors to adopt a risk-off stance, contributing to the price decline. Crypto analyst HornHairs noted that derisking before elections has precedent. Derisking into the election 5-6 days before it takes place happened in both 2020 and 2016. Price then went on to never retest the lows set the week before the election ever again. Be careful what you sell here, he remarked via X. #2 S&P 500 Loses 3-Month Trendline The correlation between Bitcoin and traditional financial markets may have also influenced BTCs price movement. The S&P 500 has fallen to its lowest level since October 9, potentially affecting investor sentiment in the crypto space. Analysts from The Kobeissi Letter observed that despite major tech companies like Apple reporting strong earnings, their stock prices have declined. “Yet another tech giant to beat earnings but trade lower,” they noted, adding that technology stocks faced widespread selling even as Meta, Amazon, and Apple exceeded earnings expectations. They added, It appears that markets are de-risking ahead of the election next week. Brace for volatility. Related Reading: BlackRocks Bitcoin ETF Reaches 2% Of Total BTC Supply Amid Record Inflows Crypto trader Marco Johanning highlighted concerns about the S&P 500 losing its three-month trendline. Given that the S&P 500 lost the 3-months trendline yesterday, it looks more like a potential selloff before the US election on Tuesday and lower prices in the short term. The perfect bounce level is the 7-month trendline (blue). I don’t want to see prices below the POC/key level around 63k (red), he wrote via X. #3 Leverage Flush Out A significant unwinding of leveraged positions in the markets has also contributed to Bitcoin’s price decline. The market correction appears to be a healthy response to an overextension driven by leverage. Renowned crypto analyst Miles Deutscher noted: This pullback is normal (and expected). Market was looking overextended the last few days, and largely driven by leverage. Still not buying heavy as it isn’t a full cascade yetwill wait for one of those days around the election. Not a bad DCA day for certain coins tho. Austin Reid, Global Head of Revenue & Business at crypto prime brokerage firm FalconX, pointed out that the crypto derivatives market was “on fire” ahead of the election, with futures open interest for BTC, ETH, and SOL crossing the $50 billion mark for the first time. On-chain analyst Axel Adler Jr reported that open interest was reduced by $2.1 billion, implying a significant leverage flush out. According to data from Coinglass, over the past 24 hours, 93,864 traders were liquidated, with total liquidations amounting to $286.73 million. The largest single liquidation order occurred on Binance’s BTCUSDT pair, valued at $11.26 million. For Bitcoin alone, $81.38 million in long positions were liquidatedthe largest amount since October 1. At press time, BTC traded at $69,446. Featured image created with DALL.E, chart from TradingView.com
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