Markets
Why Bitcoin Price Crashed to $65,000, What Next?
This week, the cryptocurrency market saw a significant slowdown, with Bitcoin, the leading digital currency, falling to its lowest value in four weeks. The week started with optimism due to falling inflation data, but hopes were quickly dashed, especially for Bitcoin.
Following Bitcoin’s lead, other major cryptocurrencies like Solana, Avalanche, Cardano, and Near also suffered substantial losses, falling between 15 and 20 percent.
A sudden fall
Bitcoin experienced a sudden drop of more than 2% in just one hour, going from $67,000 to $65,100. This is a significant drop of 7.5% over the past week, causing concern among investors.
The market has gone through a difficult period, with nearly $214 million in leveraged derivatives liquidated in the last 24 hours alone, and over $870 million for the week. These liquidations, intended to reduce excessive risks, added further downward pressure on the price of Bitcoin.
Additionally, recent economic data and Federal Reserve projections do not match investor expectations in favor of looser monetary policy, which further dampens sentiment. Political uncertainty in Europe, particularly the snap elections in France, have also boosted the US Dollar Index (DXY), adding to Bitcoin’s challenges.
Whale activity adds to slowdown
Significant whale activity has been reported, with large Bitcoin holders selling their holdings. Notably, a Bitcoin whale transferred 15,975 units of the cryptocurrency on June 14 in a single transaction to digital asset exchange Binance. This sell-off signals bearish sentiment and likely contributed to the recent Bitcoin crisis.
Mining revenues have also declined, especially after the Bitcoin halving in April. Analysts noted a substantial increase in mining costs after the halving, further straining Bitcoin market dynamics.
What’s next for Bitcoin?
Bitcoin is at a crucial point after failing to surpass $67,500 this week. If it closes below this level, it could trigger a downtrend towards the 3-month EMA, currently around $64,800. A fall below could send Bitcoin down to $61,000, the lower boundary of its long-term ascending channel.
Read also: Crypto Markets Continue to Fall as Institutions Hoard ETFs: Who is Selling BTC?
The price of Bitcoin is at a crossroads. Where do you see this going from here? Share your thoughts.