As a seasoned crypto investor with years of experience under my belt, I’ve seen my fair share of market volatility and price dips in Bitcoin. The recent dip below the $64,000 level has raised concerns among investors, myself included. The reasons behind this dip are multifaceted, and as we delve deeper into the situation, it becomes clear that there are three main factors driving the current market sentiment.
The cost of a bitcoin has encountered significant selling force recently, resulting in its recent decline. At present, the Bitcoin price has fallen beneath the $64,000 mark, causing apprehension among investors about a possible drop to $60,000 or even lower.
As a crypto investor, I’m keeping a close eye on the current market situation and trying to understand why Bitcoin’s price has taken a hit today. Let’s explore the top three possible explanations:
Why Is Bitcoin Price Falling?
Based on current market trends, it seems investors are holding back from making significant moves. Several factors appear to be causing caution among investors, which could negatively influence Bitcoin’s price and the overall crypto market.
Here are the top three reasons behind the recent Bitcoin price dip:
Bitcoin Options Expiry
The price of Bitcoin decreased today due to the upcoming expiration of approximately $1.96 billion in Bitcoin and Ethereum options. Out of this total, around $1.26 billion is tied to Bitcoin options with a put-to-call ratio of 0.46 and a maximum pain point set at $67,000. Consequently, market instability has intensified as a result.
Alternatively, the impending expiration of Ethereum options, worth $693.37 million, with a put-to-call ratio of 0.32 and a maximum pain point of $3,500, adds to the market’s volatility. The expected price shifts linked to these expirations are affecting traders and investors, leading them to closely examine current price patterns.
During options expiry periods, markets often experience increased volatility. Yet, this short-term instability typically contributes to market stability over the longer term.
US PMI Impact
Later today, S&P Global will unveil the latest U.S. PMI report, a monthly assessment of business conditions in both manufacturing and services sectors. This crucial economic indicator is closely monitored by investors to gain insight into the overall health of the American economy. Its impact extends beyond the United States; the direction it points could significantly influence the trend in various financial markets, including Bitcoin.
In May, the S&P Global Composite PMI saw a significant surge, rising from 51.3 in the previous month to reach 54.5. Additionally, the U.S. Manufacturing PMI experienced an uptick, climbing from 50 in April to hit 51.3 last month.
The anticipated S&P Global U.S. Services PMI for June is projected to demonstrate a more modest growth rate of 54, down from 54.8 in April. Similarly, the Manufacturing PMI is predicted to decline slightly to 51. Keep in mind that figures above 50 reflect expansion in their respective sectors’ business activities.
As a crypto investor, I’ve noticed that the Bitcoin price has been trading rather grimly lately due to the ongoing macroeconomic pressures and the U.S. Federal Reserve’s commitment to their interest rate plans. However, it is important to keep in mind that today’s S&P Global PMI data release could significantly impact Bitcoin’s future trajectory.
Bitcoin ETF Outflow
Over the past few days, there have been sizeable withdrawals from the U.S. Spot Bitcoin Exchange-Traded Fund (ETF). Following a strong period of investments in the previous weeks, the fund has experienced a decline in interest recently.
On June 20th, approximately $140 million was withdrawn from the U.S. Spot Bitcoin Exchange-Traded Fund (ETF), with GrayScale’s GBTC accounting for around $53.1 million of that amount. Between now and Thursday this week, a total of roughly $440 million has been taken out of the ETF.
Bottom line
According to well-known cryptocurrency analyst Rekt Capital, Bitcoin’s price is undergoing significant pressure. Although it has made recent efforts to rebound, Bitcoin has encountered a firm resistance at its Lower High, implying that the digital currency isn’t prepared to break free from its June downtrend. In simpler terms, Rekt Capital predicts a further decline in Bitcoin’s value, potentially reaching $60,000, before experiencing an upturn.
Analyst Ali Martinez noticed a drop in Bitcoin’s on-chain exchange activity, indicating decreased investor engagement and lower network utilization. This decrease in activity may suggest that Bitcoin could continue to exhibit muted performance until the market mood improves and trading activity resurges.
Analysts advise keeping a close eye on resistance levels and on-chain metrics for potential indications of an imminent trend reversal. Additionally, it’s worth noting that, according to Ali Martinez’s past statements, Bitcoin could experience a possible correction down to $61,000 if it falls below the $66,254 mark.
At present, the price of Bitcoin has dropped approximately 3.6%, reaching $63,588.79. Simultaneously, trading volume experienced a substantial increase of 31.74% compared to the previous day. Furthermore, Bitcoin Futures Open Interest saw a decline of 1.95% over the last 24 hours and a 0.75% decrease within the past four hours, amounting to 532.30K BTC or $34.05 billion.
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2024-06-21 16:15