TLDR
Bitcoin’s price dropped below $63,000, reaching as low as $62,500.
Over 60,000 traders were liquidated, resulting in losses exceeding $130 million.
Factors contributing to the decline include decreased whale transactions, withdrawals from derivative exchanges, and outflows from spot ETFs.
Altcoins also experienced significant losses, with some dropping by 4% or more.
The market is facing pressure from a strong dollar and anticipation of upcoming PCE inflation data.
The cryptocurrency market experienced a significant downturn on Monday, June 24, 2024, as Bitcoin’s price plummeted below the $63,000 mark. This sudden drop led to the liquidation of over 60,000 traders and caused ripple effects throughout the crypto ecosystem.
Bitcoin, the world’s largest cryptocurrency by market capitalization, fell to a low of $62,634, marking its lowest point in several weeks.
The price decline resulted in more than $130 million in losses for traders in a single day. This sharp decrease caught many off guard, triggering a series of automatic liquidations on various trading platforms.
The recent price movement continues a downward trend that began last week. Bitcoin had reached a weekly high of $67,000 last Tuesday but has since experienced consistent bearish pressure. By Friday, the price had already dropped to $63,500, with the weekend seeing a brief stabilization around $64,000 before Monday’s significant decline.
Several factors appear to be contributing to this market correction.
One notable element is the decrease in whale transactions. Over the past two days, these large-scale transactions have dropped by 42%, falling from 17,091 to 9,923. This reduction in activity from major players in the market has likely contributed to the overall bearish sentiment.
There has been a wave of withdrawals from derivative exchanges. Some traders have adopted a “risk-off” approach, reducing their exposure by moving assets away from these platforms. The Interexchange-Flow-Pulse (IFP) indicator, which tracks Bitcoin movements between spot and derivative exchanges, has turned red, signaling a decline in market confidence.
Another factor putting pressure on Bitcoin’s price is the outflow from spot exchange-traded funds (ETFs). The previous week saw substantial withdrawals from these investment vehicles, contributing to the overall bearish trend in the market.
The broader economic context is also playing a role in Bitcoin’s price movement. The cryptocurrency market is facing pressure from a strong U.S. dollar, which came close to a two-month high following robust U.S. purchasing managers index data. This strength in the dollar has made alternative assets like cryptocurrencies less attractive to some investors.
The market is anticipating key Personal Consumption Expenditures (PCE) price index data, due to be released on Friday.
This inflation indicator is closely watched by the Federal Reserve and could influence future interest rate decisions. While the upcoming data is expected to show some mild cooling in inflation, it is still likely to remain above the Fed’s 2% annual target, potentially giving the central bank more reason to maintain high interest rates.
High interest rates generally have a negative impact on speculative assets like cryptocurrencies, as they reduce the appeal of these investments compared to more traditional, interest-bearing options.
The effects of this market downturn were not limited to Bitcoin. Altcoins, or alternative cryptocurrencies, also experienced significant losses. Ethereum, the second-largest cryptocurrency, fell by 4.2% to $3,366.81, hitting a one-month low. Other major altcoins like XRP, Cardano (ADA), and Solana (SOL) saw declines of 3.3%, 4.3%, and 7.4%, respectively.
Meme-inspired cryptocurrencies were not spared from the market turbulence. Dogecoin (DOGE) and Shiba Inu (SHIB) experienced drops of 4.7% and 5.8%, respectively.
The current market situation has led to increased skepticism among traders regarding the timing of potential interest rate cuts by the Federal Reserve. This sentiment is unlikely to improve significantly in the near term, especially with the upcoming PCE data release.
The post Why is Crypto Down Today? BTC Price Below $63,000 Amid Market Pressures & Trader Liquidations appeared first on Blockonomi.
