The post Why Did Bitcoin’s (BTC) Price Drop to $62K? Key Factors Behind the Monthly Low appeared first on Coinpedia Fintech News
Bitcoin recently fell below $62,607, making a new monthly low. Various factors contributed to this drop, offering insights into the current state of the market.
Read on to get a clear picture of the recent Bitcoin Price Drop!
Reasons for the Bitcoin Price Drop: A Simple Analysis
Here are the price reasons pointed out by an expert, identified as Wise Advice in the X platform.
Miner Selling Pressure: One major factor behind the recent price decline is the substantial selling by miners. Since the beginning of June 2024, miners have sold over 30,000 BTC, which is around $2 billion. This significant amount of selling has mainly occurred on exchanges, leading to increased selling pressure and a subsequent drop in Bitcoin’s price.
FED Liquidity Reversal: Bitcoin’s price is closely linked to the liquidity levels controlled by the FED. In the past two weeks, the FED’s liquidity has turned negative, directly impacting Bictoin’s price. Typically, when the FED reduces liquidity, it negatively affects risk assets like Bitcoin.
Absence of New Inflows: Over the past week, Bitcoin ETFs have experienced consistent outflows, adding to the selling pressure. The lack of new investments is another reason for the ongoing price decline, as fewer funds are entering the market to support the price.
Decline in the IFP Indicator: The Inter-Exchange Flow Pulse indicator, which measures the flow of Bitcoin from spot exchanges to derivative exchanges, has been falling. This decline means more Bitcoin is being sent to spot exchanges, indicating a bearish market sentiment and further driving down the price.
June Trend: A Historical Bottoming Month for Bitcoin
Historically, June has often been the month where Bitcoin finds its yearly bottom. This pattern has been consistent over the past few years: In June 2020, Bitcoin reached a low of $9,000; in June 2021, it bottomed out at $29,500; in June 2022, it hit a low of $19,000; and in June 2023, it reached a low of $24,7000. Following this June trend, it is possible that Bitcoin could bottom out around $59,000 to $60,000 this month before stabilising or beginning to recover.
Bitcoin Recent Market Performance
At the start of this month (June, 2024), Bitcoin was priced around $67,713. It briefly climbed to over $71,103 on June 5, but since then, it has been on a downward trajectory. This decline has been characterised by numerous large red candlesticks and a few small green ones on the daily BTC/USD chart. Over the past 30 days, Bitcoin has experienced an 8.8% decline, with a 5.2% drop in the past week and a 2.6% decrease in the last 24 hours.
In conclusion, Bitcoin’s recent price drop can be attributed to miner selling, the reversal of FED liquidity, consistent ETF outflows, and a falling IFP indicator. Despite the bearish sentiment, historical patterns suggest that June might again be the month Bitcoin funds its bottom.