Markets
Why does the price of Bitcoin keep falling? The bear is taking over the market
Once again, Bitcoin price is stuck in the mud. Since June 5, Bitcoin it collapsed from $71,083 to $60,600, marking a sharp decline of more than 16%. This sharp decline has led many in the crypto community to question the reasons behind Bitcoin’s persistent difficulties and its inability to regain momentum.
What’s Holding Bitcoin Back? And Is a Recovery Possible? Dig deeper to find out why experts are worried and what it means for the future of cryptocurrencies.
ETF outflows intensify market pressure
According to Lookonchain, a leading blockchain analytics platform, outflows from Bitcoin ETFs they continued to put pressure on the market. On June 28, nine ETFs saw a combined outflow of 4,428 Bitcoin, valued at approximately $271 million. Grayscale (GBTC) led these outflows with 3,375 BTC, followed by ARK Investment with 720 BTC. This substantial selling pressure has undoubtedly affected Bitcoin’s price stability.
Despite the large outflows, there was a net inflow of 596 Bitcoin into the ETFs, worth about $36.49 million. This mixed activity indicates that while some ETFs are dumping their Bitcoin, others are still buying, reflecting a divided sentiment in the market.
PCE data cooling
The price of Bitcoin has remained relatively stable despite recent US macroeconomic data. The core personal consumption expenditures (PCE) price index, a key measure of inflation used by the Federal Reserve, rose at an annual rate of 2.6% in May, the lowest increase since March 2021. Up On a monthly basis, core PCE posted a modest increase of just 0.1%, the slowest since November 2023.
However, Bitcoin continues to hover around the $60,000 mark, showing little reaction to these low inflation numbers.
Government actions raise concerns among investors
Recent moves by the US government have increased market uncertainties. A government-associated address transferred 11.84 BTC, worth approximately $726,000, to a new address. While it was a relatively small transaction, it has sparked speculation about potential larger moves by the government, causing unease among investors who fear possible large-scale sales that could further depress Bitcoin prices.
Analyst raises alarm
Market analyst Willy Woo expressed concerns about Bitcoin’s weakening support below the $60,000 mark. Woo warns that if Bitcoin fails to maintain this level, it could trigger a significant downtrend, potentially pushing the price to $54,000.
He attributes the recent price tests of $58,000 to the liquidation of leveraged positions and selling pressure from miners, indicating that the market has not yet fully recovered from its downtrend and remains susceptible to further declines.
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Will institutional investors return or are they souring cryptocurrencies? Stay tuned to find out.