Why Bitcoin Price Is Falling Today?
The Bitcoin market price has experienced a significant drop today, plummeting from $63,446 to $60,763 within a few hours, marking a 4.3% decrease in the past 24 hours. Furthermore, Bitcoin has dropped by 15% in the past month since reaching its high of $70,000. This sudden decline is attributed to various factors affecting the US economy and investor sentiment.
Multiple Reasons for Bitcoin’s Decline
US Economic Indicators
The latest inflation and consumer confidence data from the United States have played a crucial role in Bitcoin‘s decline. Reports from the University of Michigan indicate that the Consumer Confidence Index dropped from 77.2 in April to 67.4 in May, hitting the lowest level in six months and falling below market expectations.
Additionally, inflation expectations for the next year have risen to 3.5%, reaching a six-month high, further exacerbating economic concerns.
Federal Reserve Warnings
Comments from Federal Reserve officials have also heightened market uncertainty. Federal Reserve’s Lorie Logan emphasized the risks of upward inflation and the necessity of policy flexibility, indicating that a rate cut is premature. Similarly, Federal Reserve Board member Bowman emphasized the importance of maintaining policy stability in the long term.
Outflow of Funds from US Spot Bitcoin ETFs
In addition to economic indicators, outflows from US spot Bitcoin ETFs (especially Grayscale Bitcoin Trust (GBTC)) exceeded $100 million on Friday. This trend reflects investors’ cautious stance amid economic uncertainty.
$50 Million Liquidation
The broader cryptocurrency market experienced massive liquidations, with a total of over $156 million liquidated within 24 hours. This includes $131 million in long positions and nearly $25 million in short positions. The market saw over $50 million in liquidations within just one hour, indicating a rapid and efficient shift in market sentiment.
Bitcoin Price Adjustment Imminent: $52,000
Furthermore, prominent cryptocurrency analyst Michael van de Poppe emphasized the final accumulation phase underway in the Bitcoin market dynamics. Characteristics of this phase include low volatility and price fluctuations, indicating a critical moment in Bitcoin price trends.
Van de Poppe stated that Bitcoin is currently retracing to crucial support levels. Failure to hold this level could lead to deeper adjustments, with Bitcoin returning to the range of $52,000 to $55,000.
Reaching this range would signify that the potential bullish momentum has entered its final phase of correction before recovery.