As a researcher with a background in financial markets and cryptocurrencies, I have witnessed the volatile nature of the crypto market firsthand. This week’s inflation report brought some relief to investors with lower-than-expected rates, but the top cryptos failed to capitalize on this news for extended periods. The sudden drop in Bitcoin (BTC) from over $70,000 last week to below $67,000 early this week was disheartening for many holders and traders.
As a researcher studying the crypto market, I’ve observed an intriguing development: despite recent reports of lower-than-anticipated inflation rates, the top cryptocurrencies have failed to sustain their gains for extended periods. Consequently, many investors have expressed disappointment and triggered a series of liquidations. For instance, Bitcoin, which had surpassed $70,000 last week, dipped below $67,000 early this week.
As a crypto investor, I’ve witnessed some volatile price action lately. The inflation report released on Wednesday caused Bitcoin’s price to surge back up to around $70,000. However, in just one hour on Thursday, it plummeted to worrying lows of approximately $65,100 – a drop of nearly 2% from its previous level of $67,000. This unexpected price swing has left many holders and traders anxious, as they had anticipated the cryptocurrency to maintain its ground following the inflation data announcement.
Despite the positive inflation news last week, Bitcoin’s price decline towards the end of the period prevented an upward trend. The cryptocurrency’s seven-day chart shows a decrease exceeding 7%. The unexpected drop on Thursday initiated approximately $180 million in margin calls for BTC trades within a day, contributing to the subsequent 2% price decrease.
In the past week, Bitcoin experienced a significant withdrawal of approximately $870 million from leveraged trades. Meanwhile, US Bitcoin Exchange-Traded Funds (ETFs) have witnessed substantial outflows, with around $226 million being withdrawn on Thursday alone. Notable altcoins such as Solana, Avalanche, and Cardano also faced price decreases ranging from 10% to 20%. The value of Ethereum dipped down to approximately $3,400.
On a larger scale, investors have become wary of riskier investments such as cryptocurrencies following government indications that interest rates will remain unchanged in the near future. Consequently, they are withdrawing their funds from these assets, preferring instead to avoid new investments due to less advantageous borrowing costs.
When Bitcoin’s value decreases, it inevitably causes a ripple effect throughout the entire crypto market. Currently, the US Dollar is performing exceptionally well due to political instability in European countries like France. This strong dollar value makes it more challenging for Bitcoin to gain ground and, consequently, hinders the growth of altcoins as well.
Image by Mariakray from Pixabay
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2024-06-15 15:09