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Top 3 Reasons Why Bitcoin Price Is Falling Today: Should You Sell?
The cryptocurrency market recently suffered a slight slump, with its total value dropping by more than 3% to around $2.59 trillion. Bitcoin, the big player, fell below the $68,000 mark, settling around $67,600 on Tuesday. But that is not all. In the last day alone, the crypto derivatives market recorded losses of a staggering $164 million, with long traders bearing the brunt of over $140 million.
With the volatile market, many cryptocurrency traders have found comfort in stablecoins. Reports from cryptocurrency experts show that Tether USDT, with an average daily trading volume of around $47 billion, has surpassed both Bitcoin and Ethereum combined.
What is causing the nervousness and what will be the next direction of Bitcoin? Dive deeper to find out!
Why Bitcoin took a dive today
Attention to US inflation data
All eyes are on the US Bureau of Labor Statistics, which will release data on the Consumer Price Index (CPI) on Wednesday. Additionally, the US Federal Reserve will unveil its FOMC statement, economic projections and interest rates on the same day, adding to the tension.
While expectations suggest that US interest rates will remain unchanged, recent moves by the European Central Bank (ECB) and the Bank of Canada to lower rates have stirred things up. Given past instances where FOMC data has rocked the cryptocurrency world, many traders are playing it safe.
High resistance at $72k
Over the past four months, Bitcoin has faced difficulty breaking above the $72,000 resistance level, despite significant interest from large investors. From a technical perspective, there are signs that Bitcoin price could form a classic head and shoulders (H&S) pattern on a weekly basis.
Adding to the pressure is the weekly bearish divergence spotted on the Relative Strength Index (RSI), which paints a challenging picture for Bitcoin in the coming months. However, Bitcoin supporters remain confident, citing recent halving events, clearer crypto rules, and growing mass adoption.
Spot ETFs on BTC see a negative turn
After enjoying more than two weeks of positive cash flow, U.S. spot Bitcoin ETFs, which hold more than 1 million coins, faced a net outflow on Monday.
Data from these ETFs shows that BlackRock reported only modest cash flow of about $6.3 million on Monday, signaling a change in investor sentiment.
Hit us with your predictions! Where do you see the price of Bitcoin going in the next few months?