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Bitcoin plunges to $60,000 at the start of the week
A photographic illustration depicting the bitcoin cryptocurrency.
Jakub Porzycki | NurPhoto via Getty Images
Bitcoin it continued its decline to $60,000 on Monday.
According to Coin Metrics, the price of the flagship cryptocurrency fell 5% to $60,724.45. Earlier, it had fallen to $60,666.30, its lowest level in more than a month and about 17% from its March record. In the last week it has fallen more than 8%.
According to CoinShares, cryptocurrency investment products saw a second consecutive week of outflows and last week saw the lowest trading volumes globally since the launch of US bitcoin ETFs in January.
“We have seen $1.2 billion in outflows from cryptocurrency ETFs over the past two weeks, all of which began after the FOMC meeting. Our belief is that continued pessimism about the number of rate cuts is weighing on cryptocurrency sentiment ,” James Butterfill, head of research at the cryptocurrency-focused asset manager, told CNBC.
“The Fed has indicated that it needs to see further evidence of falling inflation before becoming more accommodative, so any macroeconomic statement highlighting that inflation continues to fall will likely support prices and, conversely, an inflationary date will weigh on on prices,” he added.
Eleanor Gaywood, head of strategy at Coincover, said there are often jitters in the market ahead of the personal consumption expenditure index, the Fed’s preferred inflation indicator, which will be released this Friday. She said signs of a rate cut in September could ease investor nerves and stabilize the price of bitcoin.
See graph…
Bitcoin has been steadily declining since the beginning of June
Furthermore, Bitcoin has seen an increase in long liquidations, forcing traders to sell their assets at the market price to pay off their debts. According to CoinGlass, $97.83 million in bitcoin long liquidations have occurred on centralized exchanges in the past 24 hours.
Cryptocurrencies have largely collapsed with Bitcoin. Ether lost almost 6%, while the token is linked to the smart contracts platform Solana fell 4%, payment token XRP slipped more than 1% and the meme token dogecoin dropped by 5%.
In actions, CoinBase AND MicroStrategy they fell by more than 5% each. Miners were shorter across the board.
Last week, CryptoQuant suggested that bitcoin could slide back to $60,000, after breaking below the key support of $65,800, due to a lack of bullish momentum. The firm’s on-chain data shows that traders have reduced their holdings since bitcoin hit $70,000 in late May and have yet to start buying again.
For the month, bitcoin is down nearly 10%. In early June, it briefly touched the $71,000 level, but has seen a steady decline since then. It has been largely stuck in a tight range between $60,000 and $70,000 since mid-March, when it hit its all-time high of $73,797.68.
Investors and analysts still expect the cryptocurrency to hit another record high this year. Bitwise Asset Management analyst Ryan Rasmussen called the price action “bullishly choppy.”
“There is a market-changing tailwind behind cryptocurrencies that is not reflected in choppy price action on a weekly basis,” he said, highlighting bitcoin’s more than 40% year-to-date gain, progress on ETFs on ether and cryptocurrencies political tides change in his favour.
“From a long-term investment thesis, bitcoin has rarely been more attractive than it is now.”