Bitcoin Price Plunge: The recent drop in BTC price has sparked concerns among investors, with many expecting a further correction ahead. What’s next for the cryptocurrency? Bitcoin Crash: BTC price has been on investors’ radar lately, especially with the cryptocurrency seeing a pullback today. The drop comes as the cryptocurrency recently hit all-time highs, surpassing the $93,000 mark this week. Now, as investors look for potential factors that could have triggered the recent pullback, we explore some of the main reasons behind BTC’s plunge.
Bitcoin price plummets: Why is the cryptocurrency falling today?
There could be many reasons for the recent drop in Bitcoin prices. After several macroeconomic events and current market trends have affected investor sentiment, investors may choose to wait and see.
US CPI and PPI inflation data have an impact on market sentiment
Current US inflation data shows rising prices, raising concerns among investors that the Federal Reserve may take tough measures in the future. It is worth noting that earlier this week, the US CPI inflation rate was 2.6%, the first increase in nearly eight months.
Meanwhile, yesterday’s US PPI inflation data came in at 2.4%, beating market expectations and up from 1.9% in September. While Bitcoin prices initially rose on the higher-than-expected inflation data, investors appear to be keeping their distance for now.
The Federal Reserve closely monitors these inflation data to decide on its monetary policy plans. Given the recent surge in inflationary pressures, global investors are now focusing on what the central bank may do at its December meeting.
Bitcoin price falls as miners continue to sell off
Bitcoin miners continue to sell off their holdings, weighing on overall market sentiment. This could be one of the main reasons for the recent drop in Bitcoin prices. According to Julio Moreno, head of research at CryptoQuant, a Satoshi-era miner recently sold 2,000 Bitcoins.
According to Moreno, these Bitcoins were mined in 2010 and miners never moved them. However, as the price of Bitcoin surged to new highs, some of these Bitcoins were moved to exchanges. In addition, another recent report showed that Bitcoin miners also moved 25,000 Bitcoins yesterday, which also added to the current bearish sentiment.
Bitcoin ETF outflows suggest low market interest
The U.S. spot Bitcoin ETF has seen strong inflows in the past few days, sparking market optimism. However, Farside Investors data showed that on November 14, the investment tool saw an outflow of $400.7 million, ending a six-day streak of inflows.
While the BlackRock Bitcoin ETF (IBIT) has recorded $126.5 million in inflows, other funds such as Fidelity’s FBTC and Ark Invests (ARKB) have also seen outflows. However, despite the recent outflows, total inflows into U.S. spot Bitcoin ETFs since their launch on January 10 have reached $27.8 billion so far.
Profit-taking opportunities and whale selling
With the recent highs in Bitcoin prices, many investors appear to be taking the opportunity to take profits. According to a new report from Lookonchain, a whale recently dumped 1,920 Bitcoins worth about $169 million to Binance. Over the past three days, the whale has dumped a total of 4,060 Bitcoins worth about $361 million to the same leading cryptocurrency exchange.
These massive sell-offs suggest that investors may be taking profits on the recent price surge. With this in mind, investors are increasingly concerned that if the sell-off continues, it could further drag down the price of Bitcoin and potentially trigger a further decline.
Historical trend signals of Bitcoin price pullbacks
Despite the recent Bitcoin plunge, many analysts remain optimistic about the long-term trend of Bitcoin prices. For context, historical data shows that Bitcoin typically experiences a small correction during a bull run before continuing to rise to new highs.
Considering that many people believe that the current decline is a normal trend for cryptocurrencies, while still bullish on the long-term trend of cryptocurrencies. According to well-known market experts Rekt Capital, Bitcoin's decline in the bull market will provide investors with more opportunities to buy at lower prices. With this in mind, it seems that the current decline will further push up BTC prices in the coming days.
Will the Bitcoin price crash continue?
At the time of writing, BTC price is down nearly 4% and is trading at $87,508, while trading volume has also fallen by 27% to $85 billion. Notably, the cryptocurrency has hit a 24-hour high of $91,765 after hitting an all-time high of $93,434 on November 13. Additionally, open interest in Bitcoin futures has fallen by more than 3%, indicating little interest from market participants.
In addition, Ali Martinez said in a recent X post that Bitcoin has realized $5.42 billion in profits as the price of Bitcoin surged earlier. This also brings the seller risk ratio to 0.524%, emphasizing that investors should proceed with caution.
Additionally, at the time of writing, the Bitcoin RSI is 74, indicating that the cryptocurrency is currently overbought. However, despite short-term concerns and the recent pullback in Bitcoin prices, many in the community remain bullish on the cryptocurrency in the long term. For context, Peter Brandt recently said that BTC is expected to reach $327,000 in the coming days.
