The Fed crushed investors’ hopes for multiple interest rate cuts in 2024, causing the crypto market to fall this week. Bitcoin dropped to its lowest level in nearly a month on Friday, falling over 2% in one hour to $65,100, with a 7.5% decline over the past 7 days, still hovering below $66,000.
Altcoins market saw a general decline, with Rocket Pool (RPL) rising 27.9%, Notcoin (NOT) rising 12%, and io.net (IO) rising 5.9% among the top 200 altcoins. Mog Coin (MOG) led the decline, falling 13.8%, followed by Echelon Prime (PRIME) down 13.1%, and cat in a dogs world (MEW) down 12.9%.
The total cryptocurrency market capitalization is $2.38 trillion, with Bitcoin’s dominance at 54.2%. CoinGlass data shows that market volatility led to nearly $180 million in liquidations over the past 24 hours, mainly from long positions betting on price increases. The volatile trend this week resulted in liquidations of over $870 million in positions.
In the US stock market, the Dow fell 0.15%, the S&P 500 fell 0.04%, and the Nasdaq rose 0.12% by the end of Friday.
Bitcoin experienced a sharp drop of over 7% in the past week while the US stock market hit new highs. Analysts at Secure Digital Markets stated, “Profit taking by holders and increased selling by miners, among other specific factors, have led to the low price of BTC.”
Data from analysis company CryptoQuant shows a decrease in the amount of inactive BTC over at least 12 months and two years, indicating that holders are profiting as the Bitcoin price remains close to its peak. In addition, on June 10th, miners sold at least 1,200 BTC through off-exchange transactions, setting a new record for daily trading volume in over two months.
The outflow of funds from the US spot BTC ETF also added pressure to the Bitcoin price, with a total of $2.266 billion flowing out of ETF products, the highest amount in two weeks.
Analysts stated, “The 50-day moving average for Bitcoin is around $66,000, and it could rebound to the 20-day moving average around $69,000. However, breaking below this level could trigger a bearish signal, pushing the Bitcoin price towards $63,000 or even $60,000.”
“Summer Doldrums”
Analysts at QCP Capital predict that the distribution of Bitcoin and Ethereum options suggests that the cryptocurrency market may be on the edge of summer trading doldrums.
QCP’s report indicates that traders expect relatively more price volatility in ETH in the coming months. However, the analysis added that with the price increase driven by the approval of the spot Ethereum ETF S-1 form, any higher volatility premium of ETH relative to BTC may decrease.
QCP Capital stated that traders may consider accumulating as a strategy, saying, “We are entering a quiet summer, with low volatility and no catalysts driving market development.”
Patience Advised
As Bitcoin’s retracement continues to increase, most analysts believe that the consolidation period is coming to an end. Market analyst ElonTrades posted a chart showing the price trend of Bitcoin at the end of 2020.
ElonTrades analysis stated, “It retraced by 15%, retraced by 10%, and then started to rise, which is not much different from today’s situation other than the length of time hovering near the previous all-time high; about 21 days for the former and about 100 days for the latter. I think this is also one of the reasons why people think this will be a slightly lower, longer-lasting cycle.”
CryptoCapo stated in his Telegram group, “Unless there is evidence to the contrary, $65,000 is a support level. If this support level holds, we should expect another rise.”
Author: BitpushNews Mary Liu