In recent trading days, the cryptocurrency market has been in a state of turmoil. Today, Bitcoin experienced a sharp drop, falling below the $61,000 mark. In addition, Ethereum also fell below $3,300. The cryptocurrency market as a whole has fallen into a "drought" state and is in a "silent" situation.
Industry analysts say this may be one of the toughest bull markets most people have ever experienced. So, what variables are currently facing the cryptocurrency market? When will the future "rising tide" come?
Bitcoin falls below $61,000
The decline plunged the entire cryptocurrency market into a sea of red, attracting widespread attention from the market. Analysts believe that the main reason for the sudden and sharp drop in Bitcoin prices is the lack of strong buying support. The market is facing weakness, low trading volume, and the market is in a relatively "boring" state.
The latest market news: The trustee of Mt.Gox in Mentougou said that it will start to repay BTC and BCH. Nearly 1% of the Bitcoin will cause strong selling pressure, and the market is in a panic. At the same time, referring to previous news, national-level selling pressure smashed the market! The German government sold 50,000 Bitcoins! The giant whale arbitrages 1.2 billion US dollars in two weeks! The successive negative news and selling pressure caused Bitcoin to fall continuously, with a daily drop of more than 5%, and the overall market of the crypto market was sluggish.
Data shows that in the past 24 hours, the cryptocurrency market has seen more than $150 million in liquidations. This indirectly reflects that this round of decline has indeed caused widespread panic in the cryptocurrency market. However, after Bitcoin fell below $63,000, it also triggered some long positions. Moreover, the cryptocurrency market has always had a strong ability to resist declines, and it can often rebound quickly after a sharp drop.
As for the future market, most analysts believe that Bitcoin faces the risk of further decline. The cryptocurrency research institution 10X Research Institute pointed out that although it is certain that the bull market has not ended, the upward momentum of cryptocurrencies has obviously weakened. If this round of adjustment continues, the price of Bitcoin may further drop to around $50,000.
This week's volatility warning
In addition to the chain reaction caused by the sharp drop in Bitcoin prices, the cryptocurrency market will usher in several major events in the coming week, which may also cause drastic fluctuations in the market. Investors need to remain vigilant and be prepared to respond.
First, the first presidential election debate will be held on June 27, hosted by CNN. This will be the earliest presidential election candidate debate in American history, when the two presidential candidates will engage in fierce confrontation on various issues. Historically, such major political events often have an impact on the financial market, and the cryptocurrency market is no exception. The uncertainty of the political situation may trigger fluctuations in the cryptocurrency market.
Secondly, the US government will release a number of economic data this week, among which the May core personal consumption expenditure (PCE) price index released on June 28th is the most concerned. This is one of the important indicators used by the Federal Reserve (Fed) to measure inflation changes. According to historical experience, the release of US PCE data often triggers fluctuations in the cryptocurrency market, and the performance of this data will affect the market's expectations for monetary policy. Analysts estimate that the US core PCE annual growth rate in May is estimated to drop to 2.6%, lower than 2.8% in April. If the PCE data is higher than expected, it may further exacerbate market concerns about interest rate hikes, thereby triggering a sell-off in cryptocurrencies.
At the same time, a large number of buyers on the exchange stopped losses. Faced with the sharp drop in prices, many exchange customers were forced to close their positions. This large-scale stop-loss operation further exacerbated the selling pressure in the market. In addition, as the Federal Reserve continues to raise interest rates, the global economic outlook is also facing uncertainty. Investors' concerns about future economic trends may lead to capital outflows from risky assets such as cryptocurrencies, further dragging down the market.
When will the rising tide come?
In addition to short-term price fluctuations, perhaps more worthy of attention is the liquidity of the entire cryptocurrency market. Industry analysts point out that the current cryptocurrency market is facing a serious liquidity shortage.
According to statistics, the total transaction volume of the cryptocurrency market has remained at a low level in June 2024. Some analysts even predict that the liquidity of the cryptocurrency market may further deteriorate in the future, leading to increased price volatility.
The reason is that, on the one hand, the current macroeconomic situation is not optimistic and the market sentiment is generally cautious; on the other hand, investors are temporarily on the sidelines, and short-term capital behavior has increased significantly. In addition, the cryptocurrency market itself has certain liquidity problems, and this situation may be difficult to fundamentally improve in the short term.
In this context, when will the "rising tide" come? Analysts have given different predictions on the future market trend.
Some analysts believe that this "dry" market state may just lay the foundation for future increases. Now may be the calm before the storm, and the "dullness" of the market will create conditions for future price surges.
Because the current relatively low trading volume means that market sentiment is relatively stable, funds have also been well rested, accumulating strength for the next round of gains. Once new positive factors emerge in the future, funds may flock in, driving the price of cryptocurrencies to rise.
However, in order to push the cryptocurrency prices to regain their upward trend, some major positive factors are needed, such as the improvement of the regulatory environment and the large-scale entry of institutional funds. Only when these supporting factors are in place can the cryptocurrency market be expected to get rid of the current downturn and usher in a new round of price surges.
Of course, there are also pessimistic analysts who believe that the rapid rise in the cryptocurrency market has brought extremely high expectations, but the reality has not met people's expectations, and this may be one of the most difficult bull markets that most people have experienced.
Bitcoin has now formed a "double top" pattern, which usually indicates a larger drop. If it falls below the key support level, Bitcoin may further drop to around $50,000. Therefore, the cryptocurrency market may be in a long-term sideways trend for some time to come.
Summarize
In general, the cryptocurrency market is in a stage full of uncertainty. Faced with many unfavorable factors, the cryptocurrency market may not be able to get rid of the overall downward trend in the short term. The future trend will depend on many factors such as the macroeconomic environment, regulatory policies and investor sentiment. In the long run, the industry's development momentum is still strong. I believe that as long as this round of adjustments is experienced, the future "upward tide" will eventually come.
In this market environment, there are still quite a lot of positive factors slowly fermenting, and as long as you observe carefully, you can still see confidence. Although the howling of the bear seems to be faintly audible, and the footsteps of the bull are not far away, in this context, maintaining cautious optimism, observing and actively participating at all times may be the only thing you can do in the current market atmosphere.
