The Bitcoin market has been under pressure, with the price dropping from just above $64,000 to below $62,500 at the beginning of the week, a new multi-week low. This decline is indicative of the general instability of the market and increasing rivalry among investors.
Bitcoin’s decline was announced last week due to large redemptions from spot exchange-traded Funds (ETFs). The digital currency rose to its weekly high of $67,100 on Tuesday but was trading at $63,500 on Friday after sell-offs. Even though the situation was less tense over the weekend, Bitcoin was still volatile and could not hold the $64,000 mark and did not return to the heights above $70,000.
BTC Experiences Downtrend at $62. 5, After a Spirited Fight at $72,000
The technical analysis shows that the Bitcoin price is in a bearish trend since June after being rejected at the $72,000 mark. At the time of writing, Bitcoin is trading at $59,900 and is nearing the critical $60,000 support level, a breakdown below which may lead to more downside towards the $58,000 zone, defined by the 200-day moving average. This level is important because it can define the further mid-term trend of the market.
BTC External Environment
The market is also responding to outside factors such as large redemptions from Bitcoin spot ETFs which stand at $960. 2 million in the past six days. This trend shows that institutional holders are losing confidence in BTC, as evidenced by the sale of at least 15,000 BTC. In addition, Bitcoin miners are selling their holdings, and the higher BTC accumulation by German authorities on centralized platforms is also bearish.
Fears over the U. S. interest rates and inflation data that are due soon have shifted traders to safe-haven assets, especially the U. S. dollar, which reduces the demand for risky assets such as Bitcoin. This shift is worsened by doubts on the timing of interest rate cuts by the Federal Reserve, which also affects the market sentiment on cryptocurrencies negatively.
Bitcoin’s short-term outlook appears to be anchored on the $60,000 support level. Failure to sustain this level might further extend the current bearish trend and pull down prices to the lower support levels. On the other hand, a bounce above this critical support could offer a temporary respite but will need massive volumes and a change of sentiment to hold
