As a seasoned crypto investor with a few years of experience under my belt, I’ve seen my fair share of market volatility. The recent correction in Bitcoin’s price from $72,000 to under $65,000 has left me feeling somewhat uneasy but not overly concerned.
As an analyst, I’ve observed that the Bitcoin price has been subjected to relentless selling, causing it to dip below significant support at around $65,000. Contrary to the upward trend in the US stock market, the Bitcoin price has seen a 10% decline from its previous peak of $72,000 in June. Over the past week, the BTC price has lagged behind the US stock market’s performance and reached its lowest point in over a month, with no apparent new drivers in sight.
Bitcoin Price vs Equity Underperformance to Continue
Over the past two weeks, I’ve noticed a downturn in Bitcoin and the broader crypto market. The fervor surrounding the Ethereum ETF approval seems to have subsided, leading to profit-taking. According to IntoTheBlock’s data, one significant factor contributing to this selloff is the nearly doubling of the crypto market between Q4 2023 and Q1 2024. However, it’s essential to acknowledge that other sellers have also been putting pressure on Bitcoin’s price.
In the first half of June, Bitcoin miners have sold approximately 30,000 Bitcoins, equating to around $2 billion. A significant cause for this mass selling is the recent Bitcoin halving. This event led to a substantial increase in mining costs and decreased profits. Consequently, miners have been compelled to dispose of their BTC holdings.
Bitcoin miners aren’t the only ones putting pressure on the price of Bitcoin; there’s also significant selling pressure due to large Bitcoin ETF redemptions exceeding $500 million over the past week. Simultaneously, the German government has been offloading a considerable amount of Bitcoin from its reserves, hinting at sales. The government still holds approximately 47,000 BTCs, which equate to around $3 billion in value.
Bitcoin Price Selling Can Continue Ahead
It’s intriguing to note that over 87% of Bitcoin owners have earned a profit even amidst recent price drops. This implies that there may be more opportunities for investors to realize gains in the market.
Market analysts predict that Bitcoin’s price may stabilize and continue its consolidation phase until late summer in 2024. Subsequently, a new bull market surge could commence around September, potentially bringing significant volatility coinciding with the US elections.
As a researcher, I’m currently zeroing in on next week’s upcoming release of the PCE price for May, which is scheduled for Friday. The recent decrease in the core Consumer Price Index (CPI) for May has raised concerns about potential downside risks for the core Personal Consumption Expenditures (PCE) index. Additionally, spending could be negatively impacted by weak retail sales figures. However, there’s a silver lining as personal income might experience an improvement, suggested by stronger-than-expected average hourly earnings.
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2024-06-22 12:03