What's Driving Bitcoin's Downward Trend and When Will This Correction Turn Bullish?

June 18, 2024 at 08:26 PM GST 2 mins read Market Analysis

Bitcoin’s price drop is driven by $93 million in market liquidations, geopolitical unrest, and U.S. economic strength.
A mix of trader losses and U.S. policy shifts have also contributed to Bitcoin’s recent sell-off.
Bitcoin is dipping but long-term holders remain optimistic.

Bitcoin has recently taken a significant hit, raising concerns in the cryptocurrency market. But what exactly has led to BTC dumping? According to experts, the answer is multifaceted, with several factors contributing to the downward trend.

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Analysts have pointed to a combination of market dynamics, geopolitical events, and macroeconomic indicators as the main culprits behind Bitcoin’s recent price drop. Also, market liquidations have played a pivotal role. The video below explores these factors in detail.

Selling Pressure and Geopolitical Factors

With over $93 million in crypto liquidations, traders have faced substantial losses, causing a ripple effect across the market. The selling pressure has been relentless, pushing Bitcoin’s price below key support levels.

Secondly, geopolitical tensions and economic uncertainties have created a risk-off environment among investors. The bankruptcy of a major Chinese property giant and rumors of U.S. government plans to regulate digital assets have fueled fear, uncertainty, and doubt (FUD) within the crypto community.

Macroeconomic Factors

Better-than-expected job data in the United States and rising bond yields have strengthened the dollar, making riskier assets like Bitcoin less attractive. Additionally, the gradual tightening of monetary policy by the U.S. Federal Reserve has contributed to the bearish sentiment.

Despite these challenges, some analysts remain optimistic about Bitcoin’s future. Decreasing BTC balances on exchanges suggest that investors are moving their tokens into self-custody wallets, indicating a lack of intention to sell in anticipation of future price increases.

While Bitcoin’s current slump may seem alarming, it is essential to remember that volatility is inherent in the cryptocurrency market. As the ecosystem continues to mature, investors must stay informed and vigilant to navigate these turbulent waters successfully.