In recent weeks, Bitcoin‘s price has experienced significant fluctuations, initially dropping from $70,000 to $58,500. Following a brief recovery to $62,000, the cryptocurrency has once again started to decline. This trend has sparked discussions and analyses among experts and investors, as they seek to understand the underlying factors influencing Bitcoin’s market behavior.
US Economic Data Impact
Bitcoin’s price remained relatively stable despite recent US macroeconomic reports. The Core Personal Consumption Expenditures (PCE) price index, considered a key indicator by the Federal Reserve, showed a 2.6% annual increase in May, marking its lowest level since March 2021. Monthly reviews also indicated a 0.1% rise in the core PCE, the slowest increase since November 2023, yet Bitcoin still found buyers around the $60,000 mark.
What Are Analysts Predicting?
Prominent analysts have observed that Bitcoin’s price is nearing the critical $60,000 threshold, suggesting a potential major decline if this level is breached. The CryptoQuant chart identifies $56,000 as a critical support level, with the potential for sharper declines if this support is broken. Analyst Willy Woo points to substantial selling pressure, driven by positions awaiting liquidation and miners offloading assets to manage their expenses.
Key Factors Influencing Bitcoin’s Decline
Several factors are contributing to Bitcoin’s price drop:
- Noticeable reduction in demand from long-term investors.
- Approximately 160,000 BTC (worth around $10 billion) sold in May.
- An additional 40,000 BTC removed from long-term holders’ wallets in early June.
These factors are thought to parallel the recent price fluctuations and play a significant role in the ongoing decline.
The current market scenario indicates that Bitcoin may face further volatility, with analysts closely monitoring support levels and market reactions to US economic data. As Bitcoin’s price nears critical thresholds, the coming days will likely prove crucial for investors and market watchers alike.