Bitcoin Price Crashes Below $67,000: Key Reasons
12 June 2024 - 1:00AM
NEWSBTC
The Bitcoin price has fallen by 4.7% since peaking at $71,231
yesterday, now hovering around $66,967. This decline marks a
notable return of volatility in the market, driven by several
critical factors. #1 Federal Reserve’s FOMC Meeting Anticipation
The Bitcoin market seems to be in a risk-off mode ahead of
tomorrow’s Federal Open Market Committee (FOMC) meeting on
Wednesday, June 12th. The market’s sensitivity to
macroeconomic indicators is on full display as stakeholders await
the US Federal Reserve’s decision on interest rates and its
economic projections. Current expectations suggest that the Fed
will maintain the interest rates at a range of 5.25%-5.50%, but the
market is bracing for the updated dot plot which is projected to
adopt a more hawkish stance. The adjustment anticipated
involves reducing the expected rate cuts in 2024 from three to two,
with some speculating about the possibility of only one cut. This
hawkish tilt in monetary policy projections is poised to influence
investor behavior significantly, as higher interest rates typically
dampen the appeal of non-yielding assets like cryptocurrencies.
Adding to the uncertainty, the May 2024 US Consumer Price Index
(CPI) data is scheduled for release just hours before the FOMC’s
announcement. The market has reacted strongly to US macroeconomic
data in recent months, and any deviation from expectations could
lead to substantial price fluctuations. Related Reading: FOMC
Preview: How Will Bitcoin And Crypto React? All You Need To Know
Crypto analyst Ted commented on X, noting the critical nature of
this week’s events: “After last Friday’s strong employment data,
markets have almost completely priced out a July rate cut. Powell
could quickly change this on Wednesday, especially if CPI comes in
soft. There’s an (off) chance for significant repricing this week,
which could move BTC + crypto…” #2 Intensified Spot Selling
Pressure The immediate catalyst for the recent price drop appears
to be a surge in spot selling. Analysis from alpha dōjō reveals
that heavy selling pressure was largely responsible for the slide
down to a low of $67,000. The market dynamics observed during this
period indicate a clear shift, with an increased volume of sell
orders not met by sufficient buy orders to sustain the price level.
This imbalance has led to a breach in what was previously
considered a robust support zone around $68,000. Related Reading:
Hedge Funds Heavily Betting For Bitcoin To Fall: Will This Strategy
Fail? The analysts elaborated on the situation, “Volatility has
made a comeback, with BTC dropping as much as 3.5% to a low of $67k
since yesterday. This selloff was primarily driven by heavy spot
selling pressure, which is quite negative. A major concern is the
lack of liquidations while the selloff is happening. BTC is
currently in a critical area; the daily structure has been broken.
BTC needs to bounce here, or it’s very likely we’ll fall back to
the lower $60ks.” #3 Inflow Streak In Spot Bitcoin ETF Inflows Ends
The investment dynamics within spot Bitcoin ETFs have also
reflected the market’s bearish turn. After 19 consecutive days of
positive inflows, these funds experienced significant outflows
totaling $64.9 million yesterday. Notable among these was the
Grayscale Bitcoin Trust, which saw outflows of $39.5 million. In
contrast, BlackRock registered smaller inflows of $6.3 million. The
performance of other ETF providers showed considerable variation.
Fidelity recorded outflows amounting to $3 million, while Bitwise
registered inflows of $7.6 million. In contrast, Invesco
experienced outflows of $20.5 million, and Valkyrie also reported
outflows totaling $15.8 million. At press time, BTC traded at
$66,967. Featured image created with DALL·E, chart from
TradingView.com
TRON (COIN:TRXUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
TRON (COIN:TRXUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024