Bitcoin
Why is the crypto market bearish today?
It hasn’t been an easy few days for crypto bulls. Bitcoin has recently faced a significant decline, with its price currently at $65,113 and a 24-hour trading volume of $169.865 million.
Let’s explore the main factors contributing to this slowdown in the cryptocurrency market.
Main factors contributing to the Bitcoin slowdown
According to the opinion of an expert called IT technology published on CryptoQuant, there are three main factors that are currently contributing to the downturn in BTC.
- Mining company revenue and sales pressure: Miner revenues fell by 55%, forcing miners to sell more Bitcoin to cover their costs. As a result, more Bitcoins are being transferred from miners’ wallets to exchanges, creating downward pressure on prices.
- ETF Withdrawals and Selling Pressure: Significant withdrawals from major ETFs like Fidelity and Grayscale are increasing selling pressure on Bitcoin.
- Stablecoin market stagnation: The stablecoin market is not recording new issuances, leading to reduced liquidity in the cryptocurrency market. This lack of new money entering the market increases price volatility.
Naturally, market price volatility led short-term investors to sell their holdings due to fears of future price declines.
Bitcoin Historical Trends and Support Levels: An Overview
Despite the current fear and selling, the average realized price for short-term holders is around $62,400, which historically serves as a strong support level in bull markets. Historical trends suggest that periods of sustained low miner revenues combined with a high hash rate may indicate a potential market bottom, suggesting a possible market stabilization or recovery.
BTCUSDT: TradingView
In mid-March, the price of Bitcoin was above $73,000. Since then, it has fluctuated between $71,000 and $61,000, with occasional dips. In early May, it briefly fell below $60,000 but quickly recovered. As of June 1, 2024, BTC costs around $67,763. After three consecutive days of gains, it rose to over $71,000 on June 5, 2024. However, since then, the price of Bitcoin has gradually weakened.
The road to recovery
For a sustained recovery, new flows, especially from stablecoins, and reducing selling pressure from miners and ETFs will be crucial. The strong support level around $62,400 could help stabilize Bitcoin prices in the near term.
Although current market conditions are challenging, key support levels and potential new flows could pave the way for Bitcoin price recovery. Investors will be watching these developments closely, waiting for signs of stabilization and growth in the cryptocurrency market.
Read too: Andrew Tate: Solana price drop could lead to new all-time highs
Do you believe Bitcoin will stabilize soon or are we in for a longer journey?