Why is crypto down today? BTC price below $63,000 amid market pressures and trader liquidations

TLDR

• Bitcoin price fell below $63,000, reaching $62,500.
• More than 60,000 traders were liquidated, resulting in losses exceeding $130 million.
• Factors contributing to this decline include fewer whale trades, withdrawals from derivatives exchanges and outflows from spot ETFs.
• Altcoins also suffered significant losses, with some falling 4% or more.
• The market faces pressure from a strong dollar and anticipation of upcoming PCE inflation data.

The cryptocurrency market experienced a significant slowdown on Monday June 24, 2024, as Bitcoin price dropped below $63,000. This sudden drop led to the liquidation of over 60,000 traders and impacted the entire crypto ecosystem.

Bitcoin, the world’s largest cryptocurrency by market capitalization, fell to $62,634, marking its lowest level in several weeks.

The price drop resulted in losses of over $130 million for traders in a single day. This sharp drop took many people by surprise, triggering a series of automatic liquidations on various trading platforms.

The recent price movement continues a downward trend that began last week. Bitcoin hit a weekly high of $67,000 last Tuesday, but has since been under steady downward pressure. By Friday, the price had already fallen to $63,500, with the weekend seeing a brief stabilization around $64,000 before Monday’s significant drop.

Several factors appear to be contributing to this market correction.

1. One notable element is the decrease in transactions with whales. Over the past two days, these large-scale transactions fell 42%, from 17,091 to 9,923. This reduction in activity from major market participants likely contributed to the overall bearish sentiment.
2. There has been a wave of withdrawals from derivatives exchanges. Some traders have taken a “risk-free” approach, reducing their exposure by moving assets away from these platforms. The Interexchange-Flow-Pulse (IFP) indicator, which tracks Bitcoin’s movements between spot and derivatives exchanges, turned red, signaling a decline in market confidence.
3. Another factor putting pressure on the price of Bitcoin is the outflow of spot exchange-traded funds (ETFs). The previous week saw significant withdrawals from these investment vehicles, contributing to the overall downward trend in the market.
4. The broader economic context also plays a role in Bitcoin price action. TThe cryptocurrency market is facing pressure from a strong US dollar, which has neared its highest level in two months following strong US Purchasing Managers’ Index data. This dollar strength has made alternative assets like cryptocurrencies less attractive to some investors.

The market is awaiting key data from the Personal Consumption Expenditures (PCE) Price Index, which is due to be released on Friday.

This inflation indicator is closely watched by the Federal Reserve and could influence future interest rate decisions. Even though upcoming data is expected to show a slight slowdown in inflation, it will likely remain above the Fed’s 2% annual target, which could give the central bank more reason to maintain rates. high interest.

High interest rates generally have a negative impact on speculative assets like cryptocurrencies because they reduce the attractiveness of these investments compared to more traditional interest-bearing options.

The effects of this market slowdown were not limited to Bitcoin. Altcoins, or alternative cryptocurrencies, have also suffered significant losses. Ethereum, the second-largest cryptocurrency, fell 4.2% to $3,366.81, hitting its lowest level in a month. Other major altcoins like XRP, Cardano (ADA)And Solana (SOL) experienced declines of 3.3%, 4.3% and 7.4%, respectively.

Meme-inspired cryptocurrencies have not been spared from the market turmoil. Dogecoin (DOGE) And Shiba Inu (SHIB) experienced declines of 4.7% and 5.8% respectively.

The current market situation has led to increased skepticism among traders about the timing of possible interest rate cuts by the Federal Reserve. This sentiment is unlikely to improve significantly in the near term, particularly with the upcoming release of PCE data.

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