Bitcoin Price Dips Below $57,000: 4 Key Reasons
01 Maio 2024 - 8:42AM
NEWSBTC
Bitcoin (BTC) has witnessed a significant drop, falling to $56,556
during Wednesday morning in Europe, marking the lowest point since
late February. This downturn represents the sharpest monthly
decline since November 2022, with BTC tumbling approximately 7.5%
within the last 24 hours and breaching the previously stable
$60,000 support late Tuesday. #1 Derisking Before Today’s FOMC
Meeting Anticipation and anxiety are high in financial circles as
the Federal Open Market Committee (FOMC) is set to announce its
interest rate decision later today. This event is crucial as the
crypto market, notably Bitcoin, has grown increasingly reactive to
macroeconomic signals. Recent data, reflecting a slowdown in GDP
growth coupled with persistent inflation, has significantly reduced
expectations of interest rate cuts by the Federal Reserve. “Bitcoin
and other risk assets are currently feeling the pressure from a
stagflationary environment, geopolitical tensions, and seasonal
liquidity variations,” remarked Ted from TalkingMacro. Related
Reading: If History Repeats, This Is How Bitcoin Price Will Perform
In The Next 6 Months Initially, up to seven rate cuts were
anticipated by the end of 2024, a sentiment that has shifted
dramatically with the market now pricing in only one potential cut
by December 2024. This shift comes amidst an environment where
inflation data is trending upwards, challenging the Federal
Reserve’s position and potentially leading to a more cautious
approach from Jerome Powell, the Fed Chairman. “For the first time
in recent memory, the market is calling the Fed’s bluff, quickly
front-running the idea that the Fed may not cut at all in 2024,”
noted Ted. #2 Cyclical Bitcoin Correction Phase Following an
exceptional rally since the year’s start, the market is undergoing
a natural correction phase. Prior to the price crash, Charles
Edwards, founder of Capriole Investments, noted: “We are a day
short of breaking the record set in 2011 for days without a
meaningful dip [-25%],” emphasizing the extraordinary nature of
Bitcoin’s recent performance. Scott Melker, known as “The Wolf Of
All Streets,” highlighted technical indicators that suggested an
impending correction. “Broke and retested range lows as resistance.
[…] My biggest concern I have been discussing for months [was] that
RSI never made the trip to oversold. Almost there now, all lower
time frames oversold. This is still ONLY A 23% correction, very
shallow for a bull market and consistent with other corrections on
this run. We are yet to see a 30-40% pull back during this bull
market, like those of the past.” $BTC Daily Broke and retested
range lows as resistance. Nothing but air until around $52,000 on
the chart. My biggest concern I have been discussing for months (in
newsletter) is that RSI never made the trip to oversold. Almost
there now, all lower time frames oversold. This…
pic.twitter.com/5YZTWipBo8 — The Wolf Of All Streets (@scottmelker)
May 1, 2024 #3 Profit-Taking Traditional finance markets and
seasoned investors are seizing the opportunity to take profits
following substantial gains. “TradFi/Boomers are taking profits:
CME Open Interest is decreasing rapidly, April 29th 135,6k coins,
April 30th 123,9k coins, topped around 170.4k coins (March 20th),”
explained crypto analyst RunnerXBT. This trend confirms a broader
profit-taking strategy post significant events like the ETF
approval and the anticipation around the Bitcoin halving. “That […]
confirms my thesis that a lot of these guys longed in October 2023
because of ETF approval and BTC halving, trade played out and now
they are taking profits (yes they are still up a lot), because they
longed BTC not dead altcoins.” TradFi/Boomers are taking profits ✅
CME Open Interest is decreasing rapidlyApril 29th 135,6k coinsApril
30th 123,9k coins Topped around 170.4k coins (March 20th) That at
least for me confirms my thesis that a lot of these guys longed in
October 2023 because of ETF approval… pic.twitter.com/M8KY1NfCtK —
RunnerXBT (@RunnerXBT) May 1, 2024 #4 US ETF Flows And Hong Kong
Disappointment The dynamics surrounding spot Bitcoin ETFs have
shown significant strains, evidenced by recent activities in both
US and Hong Kong markets. In the United States, Bitcoin
exchange-traded funds (ETFs) faced substantial outflows, indicating
a cooling investor sentiment. Related Reading: USDT Dominance
Falling, Analyst Predicts Bitcoin To Reach $80,000 According to
recent data, the total outflows from US spot Bitcoin ETFs amounted
to $161.6 million. Notably, the Grayscale Bitcoin Trust (GBTC)
experienced outflows of $93.2 million, while Fidelity and Bitwise
registered outflows of $35.3 million and $34.3 million,
respectively. BlackRock had zero net flows once again. These
numbers suggest a retreat in institutional interest, which has
traditionally been a bulwark against price volatility. Parallel to
the US, the debut of Bitcoin ETFs in Hong Kong also faltered
significantly below expectations. Six newly launched ETFs, intended
to capture both Bitcoin and Ethereum markets, collectively reached
just $11 million in trading volume, starkly underperforming against
the anticipated $100 million. The spot Bitcoin ETFs accounted for
$8.5 million in trading volume. This was markedly lower than the
launch day volumes of US-based spot Bitcoin ETFs, which had reached
$655 million on their first day. #5 Long Liquidations The market
has also been impacted by substantial long liquidations, with a
total of $451.28 million liquidated in the last 24 hours alone. The
largest single liquidation was an ETH-USDT-SWAP on OKX valued at
$6.07 million, but Bitcoin-specific liquidations were significant
as well, totaling $143.04 million, according to data from
CoinGlass. These liquidations have amplified the selling pressure
on Bitcoin. At press time, BTC traded at $57,715. Featured image
from iStock, chart from TradingView.com
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