The cryptocurrency market saw a slight dip of over 3 percent, with the total market cap sitting at approximately $2.59 trillion. Leading the decline was Bitcoin (BTC), which fell below $68k to hover around $67,600 on Tuesday. A significant portion of the $164 million lost in crypto derivatives trading in the last 24 hours involved long traders, with more than $140 million evaporating.

Given the increased volatility, many cryptocurrency traders have sought refuge in stablecoins. Recent data from crypto sources reveals that the daily average trading volume for Tether USDT, standing at around $47 billion, surpassed that of both Bitcoin and Ethereum combined.

Reasons behind Bitcoin’s Price Drop Today
Upcoming US Economic News on Inflation
The United States Bureau of Labor Statistics is set to release the highly anticipated Consumer Price Index (CPI) data on Wednesday. Additionally, the United States Federal Reserve will issue the FOMC statement, economic projections, and interest rates update on the same day. While expectations point to the US interest rates remaining unchanged, the European Central Bank (ECB) and the Bank of Canada have recently lowered their rates.

With previous FOMC reports sparking increased volatility in the crypto market, many traders are opting to observe from the sidelines for now.

Resistance at $72k Persists
Over the past four months, Bitcoin has struggled to surpass the $72k resistance level despite strong demand from institutional investors. Technical analysis suggests a possible formation of a head and shoulders (H&S) pattern on the weekly chart, coupled with bearish divergence on the Relative Strength Index (RSI), indicating a tough road ahead for Bitcoin’s price in the coming months.

Nevertheless, Bitcoin bulls remain optimistic, bolstered by the recent halving event, clearer regulatory frameworks, and growing mass adoption.

Spot BTC ETFs Witness Negative Inflows
On June 10, 2024, spot Bitcoin ETFs in the US experienced a net outflow of $65 million, marking a stark contrast from the 19 consecutive days of positive inflows. Notably, BlackRock’s IBIT saw a significant drop in single-day inflows from $168 million to just $6.3 million. Grayscale’s GBTC also continued to see outflows.

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Bitcoin
Price Analysis

Key Points
– Cryptocurrency market sees a decline, with Bitcoin dropping below $71,000 and Ethereum at $3,600, leading to a global market cap of $2.55 trillion.
– U.S. Employment Report indicates the addition of 272,000 jobs, but the unemployment rate rises to 4.0%.
– Stronger U.S. Dollar Index leads to a rise in the dollar’s value, affecting riskier assets like cryptocurrencies.
The cryptocurrency market has experienced a significant downturn today, with Bitcoin falling below the $71,000 mark to $68,500, and Ethereum slipping to $3,600. This has resulted in a 2.60% decrease in the global crypto market cap to $2.55 trillion, while the total market volume has surged by 42.17% to $106.43 billion. Many are now searching for the cause behind this sudden market drop.

Reasons for the Market Decline
The release of the U.S. Employment Situation Summary Report has played a pivotal role in this decline. The report revealed the addition of 272,000 jobs in May, exceeding expectations. However, the unemployment rate has also seen a slight increase from 3.9% to 4.0%, sending mixed signals about the economy’s health. Despite this data, Markus Thielen, head of research at 10x Research, believes that the employment report is not the primary cause of the crypto market drop. Instead, crypto assets were sold off at the end of Friday without any clear reason, leading to the decline in Bitcoin’s price.

Impact of Higher Non-Farm Payrolls (NFP)
In addition, the rise in Non-Farm Payrolls suggests a strong labor market, potentially prompting the Federal Reserve to consider raising interest rates. Higher interest rates typically result in a stronger dollar, diminishing the appeal of riskier assets such as cryptocurrencies.

Strong Dollar, Weaker Crypto
Furthermore, the U.S. Dollar Index (DXY) has strengthened, indicating a rise in the dollar’s value against other currencies. A stronger dollar often prompts investors to move away from riskier assets like Bitcoin, causing their value to decrease. The combination of a robust dollar and the possibility of interest rate hikes has led to a bearish sentiment in the crypto market, with investors retreating from riskier assets.

Future Outlook for Crypto
Looking ahead, analysts had anticipated that a weaker employment report could lead to lower interest rates, potentially driving Bitcoin to new highs. Markus Thielen suggested that if the upcoming Consumer Price Index (CPI) report displays inflation at 3.3% or lower, Bitcoin could achieve new all-time highs. As the market responds to these economic indicators, it is essential to monitor future central bank announcements and economic reports for further insights into the market’s direction.