Bitcoin started the week on a shaky note, sliding below $60,000 for the first time since early May. The flagship cryptocurrency’s price dropped 7% to $59,562.54, and at its lowest point, it touched $59,021.42—nearly 19% down from its March peak. Over the past week, Bitcoin has declined by almost 11%.
Crypto investment products experienced a second consecutive week of outflows, according to CoinShares, marking the lowest trading volumes globally since U.S. Bitcoin ETFs debuted in January. James Butterfill, head of research at CoinShares, attributes this trend to growing pessimism following the Federal Open Market Committee (FOMC) meeting.
Butterfill further noted that the Fed’s stance on inflation impacts Bitcoin prices. Signs of falling inflation might support Bitcoin, whereas rising inflation could exert downward pressure.
Eleanor Gaywood, head of strategy at Coincover, pointed out the market’s nervousness ahead of the personal consumption expenditure index, the Fed’s favored inflation measure, due this Friday. “A hint of a rate cut in September could calm investors and stabilize Bitcoin,” Gaywood said.
Bitcoin’s decline has led to a surge in long liquidations, with $152.66 million liquidated in the past 24 hours alone, as traders were forced to sell at market price to cover debts. This trend extended to other cryptocurrencies: Ether dropped 4%, Solana’s token fell 2%, and XRP and Dogecoin lost 6%.
The downturn also hit equities tied to crypto, with Coinbase and MicroStrategy shares falling 6% and 7%, respectively, and most miners seeing red.
CryptoQuant had foreseen Bitcoin’s potential drop to $60,000 after it fell below the crucial $65,800 support level. Their on-chain data indicated that traders have been offloading holdings since Bitcoin neared $70,000 in late May, with no signs of renewed buying.
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