What are the Reasons for the Decline in the Crypto Market Today Examining the Main Factors
The cryptocurrency market experienced a surge in volatility this week due to a flurry of market news causing uncertainty among investors. Key events, such as the U.S. CPI and PPI data, negative inflows in spot ETFs, and Bitcoin miner capitulation, led to a significant drop in BTC price to a four-week low of $65,078. Will this correction continue into the second half of June?
Bitcoin faced bearish pressure as miners capitulated and long liquidation occurred. The price of Bitcoin has been trading sideways within two parallel trendlines on daily charts for the past three months. On June 7th, BTC price reversed from the $71,000 resistance level, dropping 8.37% to $66,114.
Uncertainty surrounding pre-CPI data failed to reverse the downward trend despite lower-than-expected inflation. Recent data from Coinglass showed significant long liquidation in the Bitcoin market, with buyers facing a $163.8 million liquidation, intensifying bearish momentum.
Miners’ capitulation is a major factor contributing to the falling prices, with the hashrate trend breaking after 18 months, indicating possible miner capitulation. Outflows in spot Bitcoin ETFs have also been recorded, with net outflows in four of the past five days, totaling $190 million on Friday.
Analysis of the daily chart revealed a bearish double-top pattern forming at the $71,000 level, signaling renewed selling pressure among investors. With a 1.1% decline on Friday, BTC price breached the $66,730 neckline support and the 50-day EMA slope, while the daily RSI slope fell below the 50% midline, indicating a bearish sentiment.
Despite the potential further decline, Bitcoin remains above the 23% retracement level, suggesting strong buyer support. The current correction presents an opportunity for investors to capitalize on dips in the market.
In conclusion, while Bitcoin is down 10% from its all-time high of $73,750, a 20-30% correction is considered normal for the volatile asset, allowing for a recovery of bullish momentum. The broader trend remains positive, and investors can seek opportunities during this correction period.