Bitcoin
Why Bitcoin Price Dropped to $65K, What’s Next?
This week, the cryptocurrency market suffered a significant downturn, with Bitcoin, the leading digital currency, falling to its lowest value in four weeks. The week started with optimism due to decreasing inflation data, but hopes were quickly dashed, especially for Bitcoin.
Following Bitcoin’s example, other major cryptocurrencies such as Solana, Avalanche, Cardano and Near also suffered substantial losses, falling between 15-20%.
A sudden dive
Bitcoin has experienced a sudden decline of more than 2% in just one hour, dropping from $67,000 to $65,100. This marked a significant drop from 7.5% last week, causing concern among investors.
The market went through a challenging period, with almost US$214 million in leveraged derivatives settled in the last 24 hours alone and more than US$870 million in the week. These sell-offs, aimed at reducing excessive risk, added further downward pressure to the Bitcoin price.
Furthermore, recent economic data and Federal Reserve projections have not coincided investor expectations towards a softer monetary policy, further dampening sentiment. Political uncertainty in Europe, especially early elections in France, also boosted the US dollar index (DXY), adding to Bitcoin’s challenges.
Whale activity contributes to recession
Significant whale activity has been reported, with large Bitcoin holders selling their holdings. Notably, a Bitcoin whale transferred 15,975 units of the cryptocurrency on June 14 in a single transaction to digital asset exchange Binance. This massive sell-off signals bearish sentiment and likely contributed to Bitcoin’s recent crash.
Mining revenue has also declined, especially after the Bitcoin halving event in April. Analysts noted a substantial increase in mining costs following the halving, further damaging Bitcoin’s market dynamics.
What’s next for Bitcoin?
Bitcoin is at a crucial point after failing to surpass $67,500 this week. If it closes below this level, it could trigger a downtrend towards the 3-month EMA, currently around $64,800. Falling below this could push Bitcoin towards $61,000, the lower limit of its long-term ascending channel.
Read too: Crypto Markets Continue to Fall as Institutions Accumulate ETFs: Who Is Selling BTC?
The price of Bitcoin is at a crossroads. Where do you see it going from here? Share your thoughts.