Bitcoin Price Drops Below $68,000: Here’s What’s Behind It

Bitcoin Price Drops Below $68,000: Here’s What’s Behind It

Bitcoin's price recently failed to break through the $70,000 mark, plummeting to $67,500. This marks a 2.8% drop in the last 24 hours, according to data from CoinMarketCap.
The drop in Bitcoin’s value resulted in the liquidation of 70,605 traders, with a cumulative position worth $169.72 million, as reported by Coinglass.

This downturn coincides with a significant outflow from U.S. spot Bitcoin ETFs for the first time in 19 days. Data from Farside Investors highlights a substantial withdrawal of $64.9 million across 11 U.S. spot Bitcoin ETFs.

Image: Spot Bitcoin ETF Inflows and Outflows Data. Source: Farside Investors.

Among these, the Grayscale Bitcoin Trust (GBTC) experienced the largest outflow, with investors pulling out $39.5 million. The Invesco Galaxy Bitcoin ETF (BTCO) followed with $20.5 million withdrawn, and the Fidelity Wise Origin Bitcoin Fund (FBTC) saw a smaller outflow of $3 million. Conversely, there were minor inflows of $7.6 million and $6.3 million into the Bitwise and BlackRock ETFs, respectively.

Altcoin Prices Also Decline

The slump in Bitcoin’s price has also negatively impacted altcoins. Ethereum has dropped 3.5% today, trading at $3,560. Other cryptocurrencies like SOL, DOGE, TON, SHIB, and LINK have similarly suffered declines. More severe drops have been observed in NOT (-19%), W (-15%), JASMY (-11%), and BRETT (-10%).

Upcoming Market Volatility

The crypto market is expected to remain highly volatile as it anticipates the U.S. Bureau of Labor Statistics' release of the Consumer Price Index (CPI) for May on June 11. According to Cointelegraph, analysts predict a 0.1% increase in inflation following a 0.5% rise in April, bringing the year-over-year rate to 3.4%. The core inflation rate is expected to rise by 0.3% in May, consistent with April’s rate.

Additionally, the Federal Reserve’s monetary policy decision will be unveiled during the two-day Federal Open Market Committee (FOMC) meeting starting the same day. Investment research firm Zacks forecasts that the Fed will likely keep interest rates steady, maintaining them at 5.25% to 5.5%.

Conclusion

The recent sharp decline in Bitcoin's price to $67,500 underscores the cryptocurrency market's inherent volatility. This drop has triggered significant trader liquidations and coincides with notable outflows from U.S. spot Bitcoin ETFs, particularly from major funds like the Grayscale Bitcoin Trust and the Invesco Galaxy Bitcoin ETF. These outflows signal a cautious sentiment among investors, possibly reflecting broader economic uncertainties and market conditions. Additionally, the impact has not been isolated to Bitcoin alone; major altcoins have also experienced significant declines, highlighting the interconnected nature of the cryptocurrency market.

Looking ahead, the market faces potential turbulence as it braces for key economic indicators and policy decisions. The forthcoming Consumer Price Index (CPI) report and the Federal Reserve's monetary policy announcement are pivotal events that could influence investor sentiment and market dynamics. With inflation expected to show a modest rise and the Fed likely maintaining current interest rates, the crypto market remains poised for further volatility. Investors will need to navigate these uncertainties with careful consideration of the broader economic landscape and its implications for cryptocurrency values.

Read too : Bitcoin Price Could Reach $150,000 if Donald Trump Wins the 2024 U.S. Presidential Election

*Disclaimer:

This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.