Technology
Monday, June 24th, 2024 3:12 pm EDT
Key Points
- Bitcoin’s price continued to decline, dropping over 4% to $61,211, with a recent low of $60,666.30, marking more than an 8% fall in the past week amid ongoing outflows from crypto investment products.
- Market jitters are influenced by pessimism over potential rate cuts following the FOMC meeting and upcoming inflation data, with significant long liquidations forcing traders to sell assets, contributing to broader declines in cryptocurrencies and related equities.
- Despite recent volatility, analysts remain optimistic about bitcoin’s long-term prospects, highlighting its 43% year-to-date gain and positive developments in the crypto sector, suggesting a potential for new records later this year.
Bitcoin continued its descent towards $60,000 on Monday, closing at $61,211.00, down over 4%, with an earlier low of $60,666.30 marking its lowest level in more than a month. This drop represents an over 8% decline in the past week. CoinShares reported that digital asset investment products have experienced a second consecutive week of outflows, with last week’s crypto investment products recording the lowest trading volumes globally since the U.S. bitcoin ETFs launched in January.
James Butterfill, head of research at CoinShares, attributes this trend to the Federal Open Market Committee (FOMC) meeting’s aftermath, which has sparked $1.2 billion in outflows from crypto ETFs over the past two weeks. He believes that continued pessimism over the number of anticipated rate cuts is negatively impacting crypto sentiment. The Federal Reserve has indicated that further evidence of declining inflation is necessary before adopting a more dovish stance. Consequently, any macroeconomic data suggesting falling inflation could support prices, whereas inflationary data would likely weigh on them.
Eleanor Gaywood, head of strategy at Coincover, noted that market jitters often precede the release of the personal consumption expenditure index, the Fed’s preferred inflation gauge, due on Friday. She suggested that signs of a rate cut in September could calm investor nerves and stabilize bitcoin’s price.
Bitcoin has been steadily descending since early June. Additionally, a significant rise in long liquidations has forced traders to sell assets at market prices to settle debts, with $97.83 million in long bitcoin liquidations occurring across centralized exchanges in the past 24 hours, according to CoinGlass.
The broader cryptocurrency market also experienced declines. Ether dropped 4%, Solana’s token fell 3%, XRP slipped 1%, and dogecoin decreased nearly 5%. In the equities market, Coinbase shares retreated by almost 4%, MicroStrategy declined over 5%, and miners saw widespread losses.
Last week, CryptoQuant predicted that bitcoin could fall back to $60,000 after breaking below the key support level of $65,800 due to a lack of bullish momentum. On-chain data indicates that traders have been reducing their holdings since bitcoin hit $70,000 in late May and have not resumed buying. For the month, bitcoin is down nearly 10%, having briefly touched $71,000 at the start of June but consistently declined since then. Since mid-March, when it reached its all-time high of $73,797.68, bitcoin has been largely confined to a narrow range between $60,000 and $70,000.
Despite recent volatility, investors and analysts remain optimistic about bitcoin’s potential to set new records this year. Ryan Rasmussen, an analyst at Bitwise Asset Management, described the current price action as “bullishly choppy,” highlighting bitcoin’s 43% year-to-date gain and progress on ether ETFs as positive factors. He also noted a favorable shift in the political landscape for crypto. From a long-term investment perspective, Rasmussen believes bitcoin is currently more attractive than ever.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/24/crypto-market-today.html
