Markets
Why does the price of Bitcoin keep falling? The bear is dominating the market
Yet again, Bitcoin price is stuck in the mud. Since June 5th, Bitcoin fell from $71,083 to $60,600, marking a sharp decline of more than 16%. This sharp drop has left many in the crypto community questioning the reasons behind Bitcoin’s persistent struggles and its inability to regain momentum.
What’s Holding Bitcoin Back? And is a recovery even possible? Dive deeper to find out why experts are concerned and what it means for the future of crypto.
ETF outflows intensify market pressure
According to Lookonchain, a leading blockchain analytics platform, outflows Bitcoin ETFs continued to exert pressure on the market. On June 28, nine ETFs recorded a combined outflow of 4,428 Bitcoins, valued at approximately $271 million. Grayscale (GBTC) led these outflows with 3,375 BTC, followed by ARK Investment with 720 BTC. This substantial selling pressure has undoubtedly affected Bitcoin’s price stability.
Despite the strong outflows, there was a net inflow of 596 Bitcoins into ETFs, worth around US$36.49 million. This mixed activity indicates that while some ETFs are unloading their Bitcoin holdings, others are still buying, reflecting divided sentiment in the market.
Cooling PCE Data
Bitcoin’s price has remained relatively stable despite recent macroeconomic figures from the U.S. The core Personal Consumption Expenditures (PCE) price index, a key inflation measure used by the Federal Reserve, rose at an annual rate of 2.6% in May, the smallest increase since March 2021. On a monthly basis, the core PCE saw a modest increase of just 0.1%, the slowest since November 2023.
However, Bitcoin continues to hover around the $60,000 mark, showing little reaction to these low inflation numbers.
Government actions raise investor concerns
Recent moves by the US government have increased market uncertainty. A government-associated address transferred 11.84 BTC, worth approximately $726,000, to a new address. While it is a relatively small transaction, it has sparked speculation about potential larger moves by the government, causing unease among investors who fear possible large-scale liquidations that could further depress Bitcoin prices.
Analyst raises alarms
Market analyst Willy Woo has expressed concerns about Bitcoin’s weakening support below the $60,000 threshold. Woo warns that if Bitcoin fails to hold this level, it could trigger a significant downtrend, potentially taking the price down to $54,000.
He attributes the recent price retests of $58,000 to liquidations of leveraged positions and selling pressure from miners, indicating that the market has not yet fully recovered from its downtrend and remains susceptible to further declines.
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Will institutional investors return or are they turning sour on crypto? Stay tuned to find out.