In seven days, from June 28 to July 5, 2024, Bitcoin fell by more than 9.5%. It was not possible to consolidate about $60,000. The world's first cryptocurrency by capitalization fell to four-month lows - below $54,500. BTC has not been worth that much since the end of February.
Source: tradingview.com
What was the reason for such a sad development of events? In fact, there are several problems. The first thing to note is the increased number of cases of liquidations (forced closure of positions). This is especially true for longs. Over the past four days (from July 2 to July 5), shorts were closed for $57.31 million. And longs were liquidated for $270.698 million, which is 4.72 times more.
Source: coinglass.com
The story of the outflow of money from spot Bitcoin ETFs also continues. This is not to say that they are somehow exorbitant. However, the last influx of funds was observed precisely on July 1 - the last day before the collapse of quotes. But on July 2 and 3, the outflow amounted to $13.62 million and $20.45 million, respectively.
Source: sosovalue.xyz
Another reason for the decline in the price of Bitcoin is the fall in miners’ income. After the halving on April 20, the daily profits of Bitcoin miners fell by 63%. They had to sell off their reserves. According to the analytical platform CryptoQuant, this figure was the highest since May 2021. However, it's not all bad. CryptoQuant also noticed a decrease in hashrate. And this, according to platform analysts, is a bullish signal. As evidence, they cite the example of late 2022, when there was a similar-sized decline in hashrate, followed by a 300% increase in the price of Bitcoin within 15 months. It is likely that the situation will repeat itself in 2024.
According to technical analysis, Bitcoin is in a bearish trend. Back in mid-June, the price broke through the 50-day moving average (indicated in blue), and this week the 200-day moving average (indicated in orange) also fell. Thus, a decline is most likely in the short and long term. The nearest support levels on the daily chart for BTC are: $53,000, $50,500 and $49,000. Resistance level is $56,500.
Source: tradingview.com
The Fear and Greed Index dropped 18 points from last week to 29, indicating fear has reignited among Bitcoin investors.
