This article will show you the real reason for the sharp drop in Bitcoin!
Will break all your perceptions of Bitcoin's decline!
On July 5, the US dollar index fell to 105.14 points, and the market's expectations for the Fed's September rate cut remain strong.
At the same time, geopolitical tensions escalated, and conflicts on the Israeli border led to large-scale fires, burning large tracts of land in southern Lebanon. In terms of military dynamics, the US military destroyed the Houthi armed forces' unmanned surface ship, and this incident had an impact on the gold market, keeping the gold price in a bullish position of $2,356 before the non-farm payrolls report.
At the same time, the cryptocurrency market experienced a huge shock. The price of Bitcoin plummeted by nearly $4,000 and once fell below the $57,000 mark. The German government's massive Bitcoin selling behavior exacerbated market turmoil, causing the price of the currency to fall below the 200-day moving average. The deterioration of this technical indicator has made traders worried about the long-term trend of the market.
The German government's selling behavior is not limited to Bitcoin, and the entire cryptocurrency market is facing huge selling pressure. Although the German government still holds a considerable Bitcoin portfolio, recent market instability has caused its value to drop significantly.
In the US market, due to the Independence Day holiday, the market needs to digest the previously released economic data. The ADP report showed that private sector employment growth was lower than expected, while initial jobless claims were higher than expected. In addition, the decline in the service PMI index also pointed to a slowdown in the US economy. Although the Fed minutes showed that officials acknowledged the economic slowdown and easing price pressures, they did not make a commitment to cut interest rates.
At the technical analysis level, the technical outlook of the US dollar index deteriorated after it fell below the 20-day simple moving average. The gold market showed a breakout trend, and analysts were optimistic about the short-term and long-term trends of gold.
At the same time, the duration and magnitude of the Bitcoin market's correction exceeded the average level, but some analysts believe that Bitcoin prices have bottomed out. Changes in large long and short positions also reflect market uncertainty and potential turnarounds.
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