As a seasoned crypto investor with a decade-long journey under my belt, I’ve seen more than a few bull runs and bear markets. The 2024 bull run has been an interesting one, to say the least. The recent dip to $55,300 has left me scratching my head, but it’s nothing that a good cup of coffee and a solid fundamental analysis can’t fix.
It’s widely recognized now that the 2024 bull market deviates from its predecessors, notably regarding the timing of the all-time high and Bitcoin‘s price behavior after the halving event.
Over the last few days, the value of the asset has significantly dropped, reaching a monthly minimum at around $55,300. Could the withdrawal of funds from Bitcoin ETFs be the reason for this decline?
ETF Exodus Continues
Approximately two weeks ago, the value of the main cryptocurrency was surging due to favorable news from the U.S., including the Federal Reserve Chair’s pledge to reduce interest rates and the backing received by a pro-cryptocurrency candidate, Donald Trump. During this period, the asset broke the $65,000 mark for the first time since early August, when a significant drop occurred.
Initially, the Bitcoin landscape shifted dramatically, causing its value to drop approximately $10,000 up until today, where it reached a low of $55,300 on Bitstamp. Despite the ongoing discourse about interest rates, with the Fed planning to reduce them this month and Trump leading in the presidential race, one notable alteration seems to be the attitude and actions of US investors regarding spot Bitcoin ETFs.
Last weekend, CryptoPotato reported significant withdrawals from financial products during the previous week. This trend has escalated this week, with withdrawals soaring to over $500 million in merely three trading days (Monday being a U.S. holiday). In fact, Tuesday saw the highest withdrawal amount since early May at approximately $287.8 million.
Is This Why BTC’s Price Tumbles?
Discussions about what’s preventing Bitcoin from surpassing its March 2024 high of $73,800 continue, but it’s worth noting that the introduction of spot Bitcoin ETFs in mid-January has significantly affected Bitcoin’s price by directing substantial funds towards these ETFs.
It appears that the ongoing trend of daily outflows for seven straight days might be the main factor contributing to Bitcoin’s recent drop in value. Since reaching its high in March, the cryptocurrency has decreased approximately 25%.
Additionally, there’s speculation within the community if the anticipated interest rate reduction by the Fed and the potential victory of Donald Trump have already been factored into current market prices. If this is true, the 2024 stock market surge might have concluded already.
Indeed, Bitcoin has repeatedly shown an uncanny ability to defy expectations, even rising after seemingly catastrophic events. This resilience makes it difficult for us not to take it seriously as the leading digital asset in terms of market capitalization.
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2024-09-06 14:05