According to Coin Metrics, the price of the largest cryptocurrency fell by 7% to $59,562.54, even dipping as low as $59,000 at one point. Bitcoin has seen a decline of almost 11% in the past week.
CoinShares data reveals that crypto investment products experienced outflows for the second consecutive week. Last week, global trading volumes were also at their lowest since the launch of US Bitcoin ETFs in January 2024.
“We’ve witnessed $1.2 billion in outflows from crypto ETFs since the FOMC meeting. We believe the continued pessimism around the number of rate hikes is impacting crypto sentiment,” shared James Butterfill, Head of Research at CoinShares, with CNBC.
“The Fed has indicated that they need to see further evidence of declining inflation before adjusting rates. So, any macro data showing inflation continuing to fall would likely support asset prices, and conversely, inflation data would put pressure on prices,” he added.
Eleanor Gaywood, Head of Strategy at Coincover, stated that markets often become anxious ahead of the release of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, which is expected on June 28th. She believes that if there are signs of a Fed rate cut in September 2024, Bitcoin investors may feel less concerned.
Other cryptocurrencies also saw significant declines alongside Bitcoin. Ether lost 4%, while Solana and XRP fell by 2%. Dogecoin decreased by nearly 6%.
In the stock market, crypto-related stocks took a hit, with Coinbase and MicroStrategy dropping by 6% and 7%, respectively. Almost all crypto miners were in the red.
CryptoQuant predicted last week that Bitcoin could return to the $60,000 level after breaking below the crucial $65,800 support due to a lack of bullish momentum. Their data showed that traders have been reducing their holdings since Bitcoin reached $70,000 in late May 2024 and haven’t started buying back yet.
Bitcoin has declined by almost 10% so far this month. In early June 2024, it touched $71,000 but reversed course. Currently, Bitcoin is mostly ranging between $60,000 and $70,000 since hitting its all-time high of $73,797.68 in mid-March 2024.
Investors and analysts remain confident that the world’s largest cryptocurrency will recover and reach new highs this year. Ryan Rasmussen, an analyst at Bitwise Asset Management, commented that while Bitcoin’s price is still volatile, looking long-term, “Bitcoin rarely looks cheaper than it does today.”
