0
0
The Crypto Community Reacts to Recent Bitcoin Price Drop
The crypto community recently celebrated as Bitcoin reached an all-time high of over $70k, marking the end of the crypto winter. However, joy turned to concern as Bitcoin’s price dipped below $65k, signaling a potential bearish market. This drop had a ripple effect across the entire crypto space, with major Altcoins experiencing double-digit percentage decreases. The 24-hour crypto market cap fell by 3.5% to $2.6 trillion, creating a tense atmosphere among investors.
Factors Behind the Market Drop
Bitcoin ETF Outflows: In the past few days, significant ETFs such as Fidelity, ARK, and Grayscale witnessed massive withdrawals totaling over $145 million. This selling pressure on Bitcoin reflected investor uncertainty amidst market volatility. On-chain data showed a total net inflow of less than $15 billion over 109 days of trading, with Fidelity Wise Origin Bitcoin Fund reporting the largest outflow of nearly $91 million.
The Political Aspect: The U.S. has consistently shown reluctance towards decentralized cryptocurrencies through strict laws and unclear regulations. A recent speech by U.S. FED Chairman Jerome Powell, indicating limited interest rate hikes for 2024, caused investors to rethink their crypto investments. French President Emmanuel Macron’s call for early elections also contributed to uncertainty, prompting traders to flock to the U.S. Dollar, which saw a rise. This sudden strengthening of the Dollar, inversely correlated to Bitcoin, may have further impacted the market.
The Mining Factor: Miners play a crucial role in the Bitcoin blockchain, and their activities have always influenced the price. With Bitcoin’s price drop, miners experienced an 8% profit decrease. The hashprice, or revenue generated from 1 Petahash per second (PH/s), fell from $57.36 to $52.53 PH. After the recent Bitcoin halving reduced mining rewards, miners faced increased pressure due to the declining hashprice, leading them to sell Bitcoin to cover costs.
The Ethereum ETF Conundrum: Despite SEC approval, no Ethereum ETF has been given the green light, causing uncertainty around the Altcoin. The SEC closely monitors ETH ETF applications, with some rejections citing compliance issues. Investors are left in a state of flux, with emotions ranging from confusion to fear of market instability. Positive market momentum is expected upon the approval of an awaited ETF listing.
What to Expect Next?
At the time of writing, Bitcoin is priced at $64,565, with a 63% increase in trading volume totaling $39.1 billion. The surge in trading activity indicates heightened interest in Bitcoin, with active buying and selling around the $65k mark. The future remains uncertain, with regulatory, geopolitical, and market sentiment factors at play. While bulls anticipate a rise above $70k after a minor correction, bears could prompt a pullback to $60k or lower.
Image/Photo credit: source url
