What's Happening With Bitcoin

Bitcoin ended Tuesday, August 27, with a decline. The cryptocurrency failed to hold the $60,000 level. As of the time of writing, Bitcoin is trading at $59,262, which is almost 20% below the all-time high of $73,750, which was recorded on March 14, 2024. Before diving below $60,000, Bitcoin made two attempts to storm $65,000.

Against the backdrop of the fall of the cryptocurrency, the index of fear and greed went into the red zone, which indicates the uncertainty of market participants in the prospects for the growth of the coin in the near future. Why is Bitcoin falling

There is no single answer to the question "why did Bitcoin fall". The cryptocurrency fell below $60,000 due to a combination of circumstances. Let's consider the reasons for the fall of Bitcoin. Formally, they can be divided into four groups: Macroeconomic pressure

The Fed's plans for the key rate remain ambiguous. The market expects a rate cut in September, as the changes could increase the attractiveness of high-risk assets such as crypto. If the market's expectations are not met, a correction in the stock market is likely, which will negatively affect Bitcoin.

Negative economic statistics from the US. The growth of housing prices in America, which exceeded the consumer price index, also adds pressure on the political agenda before the elections, which may limit the Fed's ability to cut rates.

2. Decrease in activity in the Bitcoin network

The decline in the number of active addresses and average transaction volumes indicates a decline in interest in Bitcoin from retail investors. The decline in activity could also put pressure on BTC.

active bitcoin addressesThe curve shows the average number of active addresses in the bitcoin network over 7 days. Source: Glassnode

3. Technical and market factors

Bitcoin has crossed important support levels. Such moves could trigger a sell-off.

Significant liquidations in the crypto derivatives market. Derivatives sell-offs also contributed to Bitcoin's decline.

4. General market sentiment

Cryptocurrency and stock markets continue to show high volatility. In such conditions, many investors choose a wait-and-see approach, which is why crypto is losing support.

Altcoin Sale. Sellers' Activity$BTC

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