Why did Bitcoin price fall today? What will happen to Bitcoin price next?
Bitcoin market price fell sharply today, plummeting from $63,446 to $60,763 in a few hours, and fell 4.3% in the past 24 hours. In addition, Bitcoin has fallen 15% in the past month since reaching a high of $70,000. This sudden drop is related to a variety of factors affecting the US economy and investor sentiment.
Multiple reasons for Bitcoin's decline US economic indicators
The latest inflation and consumer confidence data in the United States played a crucial role in the decline of Bitcoin. The consumer confidence index released by the University of Michigan fell from 77.2 in April to 67.4 in May, hitting a six-month low and falling short of market expectations.
In addition, inflation expectations for the next year rose to 3.5%, a six-month high, further exacerbating economic concerns.
Warnings from the Federal Reserve
The remarks of Federal Reserve officials also added to market uncertainty. Fed Lori Logan emphasized the upside risks of inflation and stressed the need for policy flexibility, indicating that it was too early to cut interest rates. Similarly, Fed Governor Bowman stressed the importance of maintaining policy stability in the long term.
US Spot Bitcoin ETF Outflows
In addition to economic indicators, outflows from US spot Bitcoin ETFs, especially Grayscale Bitcoin Trust (GBTC), also exceeded $100 million on Friday. This trend reflects investors' cautious attitude in the face of economic uncertainty.
The market experienced large-scale liquidations, with a total of more than $156 million in liquidations within 24 hours. This includes $131 million in long positions and nearly $25 million in short positions. The market saw more than $50 million in liquidations in just one hour, indicating a rapid and effective shift in market sentiment.
The final accumulation phase is ongoing in Bitcoin market dynamics. This phase is characterized by low volatility and price fluctuations, which indicates that Bitcoin price movements are at a critical juncture.
Bitcoin is currently retreating to an important support level. Failure to hold this level could lead to a deeper correction, with Bitcoin returning to the $52,000 to $55,000 range. If this range is reached, it means that the correction has entered its final stage before the potential bullish momentum resumes.
