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Why is Bitcoin down today?
Bitcoin bears gained dominance over the bulls and pushed the BTC price below $59,000, hitting a 24-hour low of $58,402. THE market sentiment dropped from 74 (greed) last week to 30 (fear) today, indicating the severity of the negative sentiment in the cryptocurrency market.
Bitcoin’s dominance has fallen to 53.2% versus altcoins, sparking altseason speculation. however, the altcoin season is not here yet as altcoins are still oversold despite a rebound in the last 24 hours.
Bearish sentiment among derivatives traders
Bitcoin remains bearish for derivatives traders implied volatility (IV) in all terms and trading volumes indicate a decline in an environment of uncertainty. Implied volatility measures the expected price movements over the next few days based on the price and trading of an option.
Source: The Bloc
Options traders have been bearish on BTC in recent weeks Spot Bitcoin ETF have recorded consecutive outflows. According to CoinShares, digital asset investment products have seen outflows of $1.2 billion over the past two weeks. Institutional investors sold $690 million in Bitcoin and Ethereum, as Solana and XRP looked like better alternatives.
CoinGape was the first to warn of potential BTC price drop at $55,000-$57,000. According to the largest derivatives exchange Deribit, over 108,000 BTC options with a notional value of $6.7 billion are set to expire on June 28. With a put-call ratio of 0.51 and a high critical point at $57,000, Bitcoin price is more likely to remain under selling pressure.
There are many reasons why the Bitcoin correction has gotten worse. It includes the upcoming distribution of Bitcoin and Bitcoin Cash by a beleaguered exchange Mount Gox in July, the German government sold $3 billion in seized bitcoin, bitcoin miners sold $2-3 billion amid the financial crisis, and whales sold BTC worth billions. German government today he sold 900 million BTC worth $54.90 million.
Analysts like Markus Thielen of 10X Research have highlighted a double top formation
In Bitcoin chart, a technical indicator that signals a further downtrend. He predicted that Bitcoin could do this collapses to $50,000 due to the formation of the double top pattern. The key support level is at $60,000.
Investors are pessimistic about it Fed rate cuts this year despite Wall Street banks’ forecasts of rate cuts starting in September. Uncertainty over the Fed’s monetary policies has weighed heavily on Bitcoin’s recent performance. Traders prepare for the United States PCE
inflation this week and other macroeconomic events next week, such as ISM manufacturing, Fed Chair Powell’s speech, FOMC meeting statement, and employment and unemployment rates.
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Current Bitcoin market and prospects
BTC price it currently trades at $61,389, up 1% from its 24-hour low of $58,601. Trading volumes surged 31% in the past 24 hours as investors and whales bought the dip. Bearish sentiment among spot and BTC derivatives traders continues to persist ahead of US PCE inflation data and monthly options expiration.
Investors dealing with uncertainty related to inflation, interest rates and geopolitics are already preparing for volatility and uncertainty. Analysts don’t see any significant movement until the end of the month. Additionally, the third quarter has been historically weak for the bitcoin and cryptocurrency markets.
Open interest in Bitcoin futures and options has increased over the past 24 hours, as per CoinGlass data. BTC futures OI jumps 2% to over $32.84 billion, while options show a marginal increase in open interest as $60,000 in put bets were placed in the last 24 hours.
Read also: Bitcoin Bullish Flag Pattern and On-Chain Data Signal Reversal Soon at $88,000