Despite the recent Bitcoin price drop below $59,000, which has led to increased buy demand, there is growing overall fear that the cryptocurrency will fall further.
The Bitcoin (BTC) price has continued its recent downtrend after losing support around $60,000 over the past 24 hours. The flagship coin is down about 4% over the past 24 hours, trading at around $58,453 early in the European session on Thursday.
As a result, more than $275 million was lost in the cryptocurrency leveraged market, of which about $245 million was invested by long traders.
Main reasons why bitcoin price is falling
The Bitcoin price has been experiencing bearish sentiment over the past four weeks amid low optimism from whales and institutional investors. The crypto industry is expecting a $9 billion Bitcoin distribution from Mt. Gox, which most analysts see as bearish for the industry.
According to om-chain data provided by Spot On Chain, a cryptocurrency whale believed to be an institutional investor deposited over 3,500 bitcoins on the Binance cryptocurrency exchange on Thursday.
Demand for Bitcoin below $60,000 is expected to remain weak as more investors wait for the market to calm down. Furthermore, the best time to buy Bitcoin dips is when the crowd is getting impatient and skeptical about a market rebound.
As Coinspeaker explains, Bitcoin prices have been bearish in the medium term due to notable cash outflows from spot BTC ETFs. According to the latest market data, US spot Bitcoin ETFs recorded a net cash outflow of around $20 million on Wednesday, led by Grayscale’s GBTC. Notably, only Fidelity’s FBTC recorded a positive cash outflow of around $7 million, while the rest had no cash outflow on Wednesday.
Cryptocurrency markets have taken a downturn after Federal Reserve officials said at their June meeting that inflation was cooling slowly and that a rate cut was therefore not warranted.
Meanwhile, the bullish sentiment has been building as the U.S. Securities and Exchange Commission (SEC) continues to attack Web3 companies ahead of the listing of a spot Ethereum ETF.
The next step in BTC price movement
Bitcoin price has been in a reaccumulation zone after the halving and spot BTC ETF hype that attracted more new customers. According to on-chain data from IntoTheBlock, more than 16% of Bitcoin holders are in a losing position after the price fell below the critical support level of around $60,000.
As a result, further downward pressure could push the BTC price towards the next major demand zone between $40,000 and $50,000.
Nonetheless, the expected Bitcoin price rally is imminent, according to on-chain data analysis provided by CryptoQuant. The firm states that Bitcoin miner capitulation levels were at the end of 2022, around the time of the FTX debacle. If Bitcoin price does not rebound in the next two weeks, crypto capitulation will increase further in the coming months before the inevitable parabolic rally begins.
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