It’s not been an easy couple of days for crypto bulls. Bitcoin has recently faced a significant decline, with its price currently at $65,113 and a 24-hour trading volume of $169.865 million.
Let’s explore the key factors contributing to this downturn in the cryptocurrency market.
Key Factors Contributing to The Downturn of Bitcoin
As per the opinion of an expert named IT tech published in CryptoQuant, there are three key factors that are contributing currently to the downturn of BTC.
- Miner Revenues and Selling Pressure: Miner revenues have dropped by 55%, compelling miners to sell more Bitcoin to cover their costs. As a result, more Bitcoin is being moved from miners’ wallets to exchanges, creating a downward pressure on prices.
- ETF Withdrawals and Selling Pressure: Significant withdrawals from major ETFs like Fidelity and Grayscale are adding to the selling pressure on Bitcoin.
- Stablecoin Market Stagnation: The stablecoin market is not seeing new issuances, leading to reduced liquidity in the crypto market. This lack of new money entering the market increases price volatility.
Naturally, the market price volatility has prompted short-term investors to sell off their holdings due to fears of future price drops.
Bitcoin Historical Trends and Support Levels: An Overview
Despite the current fear and selling, the average realised price for short-term holders is around $62,400, which historically serves as a strong support level in bull markets. Historical trends suggest that periods of sustained low miner revenues combined with a high hashrate can indicate a potential market bottom, hinting at possible stabilisation or a market rebound.
In mid-March, Bitcoin’s price was over $73,000. Since then, it has fluctuated between $71,000 and $61,000, with occasional dips. At the beginning of May, it briefly fell below $60,000 but quickly recovered. On June 1, 2024, BTC was priced around $67,763. Following three consecutive days of gains, it rose to over $71,000 on June 5, 2024. However, since then, Bitcoin’s price has been gradually weakening.
The Path to Recovery
For a sustained recovery, new inflows, especially from stablecoins, and reduced selling pressure from miners and ETFs will be crucial. The strong support level around $62,400 could help stabilize Bitcoin prices in the near term.
While current market conditions are challenging, key support levels and potential new inflows could pave the way for Bitcoin’s price recovery. Investors will be watching these developments closely, hoping for signs of stabilization and growth in the cryptocurrency market.
Also Read : Andrew Tate: Solana’s Price Dip Could Lead to New All-Time Highs
Do you believe Bitcoin will stabilize soon, or are we in for a longer ride?
