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Bitcoin has experienced a notable decline recently, with its price currently at $65,113 and a 24-hour trading volume of $169.865 million. Several factors are contributing to this downturn. Let’s dive deep to do an in-depth analysis.
Key Factors Contributing to The Downturn of Bitcoin
As per the opinion of an expert named IT tech published in CryptoQuant, there are three key factors that are contributing currently to the downturn of BTC.
Miner Revenues and Selling Pressure: Miner revenues have dropped by 55%, compelling miners to sell more Bitcoin to cover their costs. As a result, more Bitcoin is being moved from miners’ wallets to exchanges, creating a downward pressure on prices.
ETF Withdrawals and Selling Pressure: Significant withdrawals from major ETFs like Fidelity and Grayscale are adding to the selling pressure on Bitcoin.
Stablecoin Market Stagnation: The stablecoin market is not seeing new issuances, leading to reduced liquidity in the crypto market. This lack of new money entering the market increases price volatility.
Naturally, the market price volatility has prompted short-term investors to sell off their holdings due to fears of future price drops.
Bitcoin Historical Trends and Support Levels: An Overview
Despite the current fear and selling, the average realised 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 hashrate can indicate a potential market bottom, hinting at possible stabilisation or a market rebound.
BTCUSDT: TradingView
In mid-March, Bitcoin’s price was over $73,000, and since then, it has oscillated within the average range of $71,000 and $61,000, occasionally showing slips. At the beginning of May, it slightly slipped under $60,000, but recovered soon. At the beginning of this month, on June 1, 2024, the price of BTC was around $67,763. After three consistent green candles, the price rose to over $71,000 on June 5, 2024. Since then, the strength of the price of BTC has been slowly weakening.
Bitcoin Market Future Outlook
For a sustained recovery, new inflows, especially from stablecoins, and reduced selling pressure from miners and ETFs will be critical. The strong support level of around $62,400 could help stabilise Bitcoin prices in the near term.
While the current market conditions are challenging, key support levels and potential new inflows could pave the way for the recovery of the BTC price.
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