Here’s Why Bitcoin, ETH, Crypto Prices Are Falling Today.
Bitcoin (BTC) and Ethereum (ETH), along with other cryptocurrencies, have experienced a notable decrease in prices recently. This decrease has been driven by a number of factors, specifically market sentiment, monetary policy actions, and the crypto derivatives market.
Declining Optimism and JP Morgan’s Analysis
JP Morgan has expressed anxiety over the continuous sell-off in Bitcoin as the market remains overbought. Consequently, the optimism that financial institutions have for the possibility of a price hike by the end of the year is seen to be on the decline.
This sentiment is partly due to the expectations of diminished Bitcoin supply post-halving and the assumption of sustained inflows into spot Bitcoin exchange-traded Funds (ETFs). JP Morgan, on the other hand, observes a decline in these inflows, which points to a change in investor sentiment.
Federal Reserve’s Monetary Policy
The decision of the U.S. Federal Reserve to keep the fed funds rate intact at 5.25%-5.5% is consistent with market expectations. Nonetheless, despite this sturdiness, the Chairman of the Federal Reserve, Jerome Powell, has announced a forecast for three rate cuts this year, with additional cuts forecast for 2025. This ruling has affected the dynamics of the market, as seen in the derivatives market, which has shown an upsurge in large-volume transactions.
A market researcher from GreeksLive, Adam noted that almost 30% of all the option transactions are high-volume transactions where many of the transactions are buying the call options.
Consequently, the options market for BTC and ETH has shown considerable activity, with an expiry of $2.6 billion worth of options. The result is speculation on the possibility of a new all-time high for BTC prices. This outcome is a conjecture about the likelihood of a new all-time high for Bitcoin prices.
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