Over a rough bearish period, Bitcoin price has shifted from a bullish value of $71,656 in early June to the month’s low at $61,212. It has drifted more than 7% in the last few days and has impacted the performance of the other altcoins. A major impact has also been seen in its market capitalization of $1.2 Trillion after a 5% decline from yesterday. However, a surge in its network activity is present as the trading volume has recovered to $24.4 Billion after 206% gains.
The BTC price has moved down the $62,200 support level and might continue to do so under the impact of lower lows and low highs patterns.
In this blog, let us discuss the possible reasons behind this drop.
Why Is Bitcoin Price Dropping Continuously?
Bitcoin’s downward push was higher this Monday as the price has dropped 5% in the last 24 hours due to uncertainty of key inflation data and the US interest rates. The concerns grew over the greenback (US paper dollar) getting closer to the two-month high purchasing managers index data. However, the feared sentiments about the US dollar might change around the upcoming PCE inflation data.
More importantly, there has been a continuous increase in the Bitcoin ETF outflows
since June 13, showing nervousness around the largest cryptocurrency. Additionally, the On Balance Volume (OBV) data has dropped beyond the support. As a result, Bitcoin has entered a distribution phase, hinting at downward movement.
Bitcoin Price Might Drop As Low As $60K
Bitcoin is in a selling zone where the MACD level (12, 26) is at −1244. Also, the simple and exponential moving averages of the 5,10,20,50, and 100-day intervals are in the selling zone, favoring the ongoing decline. However, the SMA (200) indicates the presence of the bulls, which can be associated with price recovery. If the Bitcoin price could surge past the resistance levels of $63,500, an uptrend might begin, pushing the value as high as $6800.
However, as the rest of the technical factors and moving averages indicate, analysts believe the price might continue to decline to $60K before attempting a recovery. A crypto analyst, Willy Woo, posted about the BTC price recovery on X. As per his post, the recovery is possible with the weak miner die and the recovery in hash rate.
In a similar situation in 2017, the rate recovery took 24 days whereas, in 2020, it took around eight days, but this year, the miner capitulation is too long after the bitcoin halved because of the “ordinal inscription boosting profits.”
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