This week, the cryptocurrency market experienced a significant downturn as Bitcoin, the leading digital currency, dropped to its lowest value in four weeks. The week started with optimism due to easing inflation data, but hopes were quickly dashed, especially for Bitcoin.
Following Bitcoin’s lead, other major cryptocurrencies like Solana, Avalanche, Cardano, and Near also suffered substantial losses, falling between 15-20%.
A Sudden Plunge
Bitcoin experienced a sudden decline of over 2% in just one hour, falling from $67,000 to $65,100. This marked a significant 7.5% drop over the past week, causing concern among investors.
The market endured a challenging period, with nearly $214 million in leveraged derivatives liquidated in the last 24 hours alone, and over $870 million for the week. These liquidations, meant to reduce excessive risk, added more downward pressure on Bitcoin’s price.
Moreover, recent economic data and Federal Reserve projections didn’t match investor expectations for a softer monetary policy, further dampening sentiment. Political uncertainty in Europe, particularly a snap election in France, also boosted the U.S. dollar index (DXY), adding to Bitcoin’s challenges.
Whale Activity Adds to the Downturn
Significant whale activity was reported, with large Bitcoin holders selling off their holdings. Notably, a Bitcoin whale transferred 15,975 units of the cryptocurrency on June 14 in a single transaction to the digital asset exchange Binance. This massive sell-off signals bearish sentiment and likely contributed to Bitcoin’s recent slump.
Mining revenue has also declined, especially following April’s Bitcoin halving event. Analysts have noted a substantial increase in mining costs after the halving, further straining Bitcoin’s market dynamics.
What’s Next for Bitcoin?
Bitcoin is at a crucial point after failing to break above $67,500 this week. If it closes below this level, it could trigger a downward trend towards the 3-month EMA, currently around $64,800. Falling below this could push Bitcoin down to $61,000, the lower limit of its long-term rising channel.
Also Read: The Crypto Markets Continue to Drop While Institutions Accumulate ETFs: Who Is Selling BTC?
Bitcoin’s price is at a crossroads. Where do you see it heading from here? Share your thoughts.
