Date: Sat, Sept 07, 2024, 10:55 AM GMT
Bitcoin (BTC) has seen a sharp decline of over 8% in the past week, dropping to around $54,000. According to 10x Research, this downturn was not unexpected. Here’s a brief look at the key factors driving this recent price drop and what might be next.
Macroeconomic Pressures
Bitcoin’s decline is largely tied to the broader economic landscape. The cryptocurrency is highly sensitive to shifts in macroeconomic data, and recent signals have pointed to a slowdown. Long-term holders have been selling off their positions, and new wallet activity has slowed, indicating reduced demand. These factors suggest that Bitcoin might not find strong support until it drops closer to $30,000.
Breaking Support Levels
The number of new Bitcoin addresses has been declining since November 2023, a sign that short-term holders are exiting the market. Meanwhile, long-term holders have capitalized on high prices, signaling a market top. The ISM Manufacturing Index, a key economic indicator, also shows a peak for risk assets, further driving Bitcoin’s repricing.
Broader Market Weakness
The economic slowdown is impacting more than just Bitcoin. The DeFi and meme coin markets are also cooling off, with Ethereum seeing a sharp revenue decline. Ether (ETH) has been particularly affected, as futures traders faced significant losses when SEC-related expectations weren’t met, diminishing the appetite for risk.
Spot ETF Influence
The hype around Bitcoin Spot ETFs initially drove prices higher, but now these investors are facing losses. With ETF outflows on the rise, it’s clear that investor confidence is waning, contributing to further price pressure.
Looking Ahead
Bitcoin’s current price pattern suggests more downside could be on the way. If trends continue, Bitcoin may fall to $45,000 in the near future. As always, it’s crucial for investors to stay informed and consider their own risk tolerance when navigating the volatile crypto market.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial advice.