Markets
Bitcoin Falls Below $60,000 to Start the Week
- The price of bitcoin fell below $60,000 on Monday for the first time since May 3.
- The flagship cryptocurrency has been stuck in a tight range between $60,000 and $70,000 since March, when it hit its all-time high and quickly corrected.
- Stocks linked to the price of Bitcoin, including Coinbase and MicroStrategy, also fell.
A photo illustration depicting the cryptocurrency bitcoin.
Jakub Porzycki | NurPhoto via Getty Images
Bitcoin continued its descent on Monday, slipping below $60,000 for the first time since May 3.
The price of the flagship cryptocurrency fell 7% to $59,562.54, according to Coin Metrics. Previously, it fell to $59,021.42., about 19% from its March record. Last week it fell almost 11%.
Crypto investment products recorded a second straight week of outflows, according to crypto-focused asset manager CoinShares. Last week, they recorded their lowest trading volumes globally since the launch of US Bitcoin ETFs in January.
“We have seen $1.2 billion in outflows from crypto ETFs over the past two weeks, all of which began after the FOMC meeting. Our belief is that continued pessimism about the number of rate cuts is weighing on sentiment towards crypto,” James Butterfill, head of research at CoinShares, told CNBC.
“The Fed has indicated that it needs to see more evidence of falling inflation before becoming more dovish, so any macroeconomic statement that emphasizes that inflation continues to fall will likely support prices, and vice versa, an inflationary date will weigh on prices,” he added.
Eleanor Gaywood, chief strategy officer at Coincover, said there was often market nervousness ahead of the Personal Consumption Expenditures Index, the Fed’s preferred inflation gauge, which is due this Friday. She said signs of a September rate cut could ease investors’ nerves and stabilize the price of Bitcoin.
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Bitcoin has been falling steadily since the beginning of June
Additionally, Bitcoin has seen an increase in long liquidations, forcing traders to sell their assets at market prices to settle their debts. Over the past 24 hours, $152.66 million in long bitcoin liquidations took place on centralized exchanges, according to CoinGlass.
Cryptocurrencies have largely fallen with Bitcoin. Ether lost 4%, while the token linked to the smart contract platform Solana fell 2%, as did the payment token XRP. The meme token dogecoin fell by almost 6%.
In actions, Coinbase And MicroStrategy decreased by 6% and 7% respectively. Almost all the miners were in the red.
Last week, CryptoQuant suggested that Bitcoin could fall back to $60,000, after falling below key support at $65,800, due to a lack of bullish momentum. The company’s on-chain data shows that traders have reduced their holdings since Bitcoin hit $70,000 in late May and have yet to start buying again.
For the month, bitcoin is down almost 10%. In early June, it briefly touched the $71,000 level, but has since been in a steady decline. It has been largely stuck in a tight range between $60,000 and $70,000 since mid-March, when it hit its all-time high of $73,797.68.
Investors and analysts are convinced that the cryptocurrency will rebound and break a new record this year. Ryan Rasmussen, an analyst at Bitwise Asset Management, called the price action “very volatile.”
“There is a market-changing tailwind behind crypto that is not reflected in the volatile price action on a weekly basis,” he said, highlighting bitcoin’s more than 40% gain since the beginning of the year and the progress of ether ETFs. and cryptos political tides are changing in his favour.
“From a long-term investment perspective, Bitcoin has rarely been as attractive as it currently is.”