As an experienced analyst, I’ve seen my fair share of market volatility and price movements in the cryptocurrency world. The recent drop in Bitcoin’s price from its early June high of $71,656 to its current level of around $62,000 is a cause for concern, but not entirely unexpected.
During a turbulent bearish phase, Bitcoin‘s value dropped significantly from its peak of $71,656 in early June to a low of $61,212 in the same month. This decline represents a loss of over 7% in just a few days and has negatively influenced the performance of other altcoins as well. The market capitalization of Bitcoin, which was previously $1.2 trillion, has experienced a decrease of approximately 5% compared to the previous day. However, there is an uptick in network activity for Bitcoin as the trading volume has rebounded by 206% to reach $24.4 billion.
The price of Bitcoin has slipped below the $62,200 mark, which previously served as a support, and could potentially fall further due to the emergence of lower lows and low highs in its pricing trend.
In this blog, let us discuss the possible reasons behind this drop.
Why Is Bitcoin Price Dropping Continuously?
The price of Bitcoin took a dive on Monday, decreasing by approximately 5% within the past 24 hours. This downturn was driven by apprehensions regarding crucial inflation data and potential US interest rate adjustments. Anxiety mounted as the US dollar inched near its two-month peak following the purchasing managers index report. However, the uneasy feelings towards the US dollar could shift with the upcoming PCE inflation data.
Significantly, Bitcoin ETF redemptions have been escalating unabated since June 13, indicative of investors’ apprehension regarding the largest cryptocurrency. Moreover, the On Balance Volume (OBV) metric has plummeted below its support threshold. Consequently, Bitcoin is currently in a distribution stage, implying a potential bearish trend.
Bitcoin Price Might Drop As Low As $60K
As a crypto investor, I’m closely monitoring the current market situation of Bitcoin. The MACD level (12, 26) is showing a reading of -1244, which indicates a selling zone. Additionally, the simple and exponential moving averages for the 5, 10, 20, 50, and 100-day intervals are all in the selling zone, suggesting that the ongoing decline might continue. However, it’s important to note that the 200-day moving average (SMA) is currently indicating the presence of the bulls. This can potentially lead to price recovery if Bitcoin manages to surge past the resistance levels at $63,500. If this happens, an uptrend might begin, pushing the value as high as $68,000.
Based on my analysis of the current market conditions and moving averages, I believe the Bitcoin price may drop down to $60K before attempting a potential recovery. Crypto analyst Willy Woo recently shared his insights on this subject via a post on platform X. According to him, the recovery could be initiated due to the weakening miner position and the hash rate’s recuperation.
In a comparable scenario in 2017, the rate of recovery took 24 days. Contrastingly, it only took approximately eight days in the year 2020. However, the ongoing miner capitulation this year has persisted longer than usual following the bitcoin halving event, allegedly due to the “ordinal inscription profits” boosting their earnings.
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2024-06-24 14:43