Why is Bitcoins Price Still Dropping Are Bears Dominating the Market
Bitcoin’s recent price decline has presented challenges for its recovery. Since June 5th, the cryptocurrency has dropped from $71,083 to $60,600, representing a decline of over 16%. Many in the crypto community are questioning the reasons behind this ongoing decline and why Bitcoin is struggling to bounce back.
A notable blockchain analytical platform, Lookonchain, has reported that Bitcoin ETFs are experiencing outflows. On June 28th, nine ETFs collectively saw an outflow of 4,428 Bitcoin, equivalent to approximately $271 million. Grayscale (GBTC) led the outflows with 3,375 BTC, followed by ARK Investment with 720 BTC. This substantial selling pressure has impacted the market dynamics and influenced Bitcoin’s price stability.
Despite the outflows, Bitcoin ETFs also saw a net inflow of 596 Bitcoin, valued at around $36.49 million. This indicates that while some ETFs are selling off their Bitcoin holdings, others are still buying.
Bitcoin’s price has remained relatively stable despite the latest U.S. macroeconomic figures. The core Personal Consumption Expenditures (PCE) price index, which the Federal Reserve uses to measure inflation, increased at an annual rate of 2.6% in May, marking the lowest increase since March 2021. On a monthly basis, the core PCE saw a slow rise of only 0.1%, the slowest since November 2023. However, Bitcoin has shown little reaction to these low inflation numbers and continues to trade around the $60,000 mark.
Market uncertainties have also been fueled by recent actions taken by the U.S. government. An address associated with the government transferred 11.84 BTC, worth approximately $726,000, to a new address. While this may seem like a small transaction, it has sparked speculation about potential larger moves by the government. Such actions can create unease among investors, who fear significant sell-offs that could further drive down Bitcoin prices.
Market analyst Willy Woo has expressed concerns about Bitcoin’s weakening support below the $60,000 mark. They warn that if the price fails to hold this level, it could trigger a significant bearish momentum, potentially pushing the price down to $54,000. Woo points out that recent price retests at $58,000 are a result of liquidations of leveraged positions and selling pressure from miners. This suggests that the market has not fully recovered from the downtrend and may still be susceptible to further declines.