Markets
Reasons why Bitcoin is struggling despite the crypto market being bullish on Wednesday
Bitcoin price has still struggled to regain its momentum despite the rally seen today in the broader crypto market. Altcoins regained their position in the green today after slow trading last week, and the rally was led by the second-largest cryptocurrency by market cap, Ethereum.
Considering this, several investors are looking for possible reasons why the price of Bitcoin is still struggling despite an upward momentum observed in the performance of altcoins.
Reasons Why Bitcoin Price Is Struggling
Bitcoin ETF Outflows
The price of Bitcoin has been struggling in recent days after witnessing a strong rally in recent months. Notably, BTC’s recent rally was mainly driven by robust inflow into US spot Bitcoin ETFs, among other reasons, which reinforced market sentiment.
Furthermore, several other market trends and optimistic predictions from market experts have also fueled market confidence. That said, the recent exit in US Spot Bitcoin ETFs
weighed on the feeling.
For context, Spot Bitcoin ETFs have seen outflows over the last four days totaling more than $700 million. On June 18, outflow was $152.4 million, led by Fidelity’s FBTC recording $83.1 million and GrayScale’s GBTC seeing an outflow of $62.3 million.
Other concerns
This notable exit raised concerns among investors, while also impacting investors’ appetite for risky bets. Furthermore, Fed officials’ mixed outlook on their policy rate plans also continued to weigh on sentiment, despite the latest data showing that inflation is cooling in the US.
That said, investors appear to be shifting their focus to lower-priced markets. altcoins for now as we seek greater clarity before entering the market. Furthermore, popular crypto market analyst Ali Martinez previously said that Bitcoin needs to rise above $66,254 to avoid a potential drop to $61,000.
However, given BTC’s current trading range at $65,000, investors remain cautious.
Read too: Bitcoin (BTC) price correction to $60,000, as per network data
Why is the crypto market booming today?
The crypto market today showed upward momentum despite the drop in Bitcoin price, reflecting investors’ growing confidence towards crypto. Notably, the rise in altcoins was led by Ethereum as its price rose after the US SEC concluded its investigation into Ethereum Security Status
.
This development comes amid growing optimism about a possible approval of the US Spot Ethereum ETF by the US SEC by July 2nd. Bloomberg analyst Eric Balchunas recently revealed this potential timeline for approval, sparking market optimism.
Macroeconomic factors at play
Recent data showing that global inflation is cooling has also reinforced market sentiment. To contextualize, the European Central Bank (ECB)
announced its first rate cut in years, boosting investor confidence.
On the other hand, the recent US CPI and PPI data also showed that inflation is cooling. While it still remains above the Fed’s 2% target, it appears to have cooled in May, raising bets about a possible two rate cuts by the Federal Reserve. However, the positive data did not have any immediate impact on Bitcoin or the broader crypto market.
Furthermore, the most recent data showed that the Inflation measured by UK CPI decreased to 2% in May, compared to 2.3% in the previous month. For the first time in about three years, the number was in line with the BoE’s target range, as investors anticipated a potential rate cut from the central bank.
Conclusion
Although Bitcoin has struggled amid the recovery seen in the broader crypto sector, market experts still remain optimistic about BTC’s long-term trajectory. For example, Ali Martinez, in a recent post on X, shared a potential timeline for Bitcoin to top, citing historical trends.
Martinez said that if Bitcoin Performance reflects the movements of the last three cycles, so Bitcoin could reach its top in December 2024 or October 2025.
However, at the time of writing, Bitcoin Price erased some of its losses and changed hands for $65,300. It reached a low of $64,066.96 in the last 24 hours. On the other hand, Ethereum Price rose nearly 4% to $3,560 after hitting a 24-hour high of $3,583.88.
Read too: The Sandbox expands Memecoin chest with purchase of DOGE, PEPE and SHIB