A third day of negative price activity in the cryptocurrency market indicates negative sentiment. The cross-border market fell $90 Billion to $2.17 Trillion, a 3.67% loss, in the past day. Bitcoin, the market leader, fell 3.27% to $58,067.63 in 24 hours. Bitcoin sank 3.6% to $60,490 on July 1 due to selling pressure and German government sales.
One key question is on everyone’s mind: has Bitcoin started a long downturn or is this simply a bump?
According to Wise Advice, a crypto analyst, the crypto market has been declining for several reasons. He pointed towards, massive withdrawals, liquidations, mining activity, government actions, and market sentiment indicators are the main causes.
Why Crypto is Dumping?
Spot ETFs See Significant Outflows Causing a Tsunami
Another outflow hit the BTC ETF on July 3. In altcoins, a crypto whale sold millions of dollars worth of coins, sustaining significant losses. The premier blockchain analysis tool Lookonchain said that this whale or institution sold 3.13 million LDO tokens for $5.77 million, 49,771 AAVE tokens worth $4.54 million, 269,177 UNI tokens worth $2.41 million, and 250,969 FXS tokens worth $708,000.
Rising Liquidation
Plus, the market has been hit hard by rising liquidations. Just yesterday, BTC liquidations reached $14 million, but today, this figure has surged to $36 million. These large-scale liquidations have triggered widespread sell-offs, further driving down BTC’s price.
Miners – Are They Impacting the Decline?
Currently, the BTC miners’ capitulation is among the major factors contributing to the falling prices. The miner community is also under strain, with a persistently low hash rate leading to decreased earnings. Consequently, many miners are selling their BTC to maintain operations or switching to other proof-of-work tokens to sustain profitability.
Government Sell-off
The actions of the German government have added to market fears. Recently, the government has been moving BTC around, causing panic among investors who are preemptively selling their holdings in anticipation of potential market impacts, even though the government hasn’t sold any coins yet.
Midterm Expectations? Bearish!
Lastly, the market sentiment has turned bearish, as indicated by a chart tracking Bitcoin flows in spot and derivative exchanges. This chart, currently in its negative zone, signifies a bearish outlook, with red indicating a bearish mood and green indicating bullish sentiment.
Moreover, Bitcoin lost several key support levels in June, suggesting a midterm bearish trend, with the focus now on maintaining support above $60,000 as the weekly Relative Strength Index (RSI) approaches 50. Analysts warn that if bearish sentiment continues, Bitcoin could drop to around $48,000 before potentially rebounding, marking a critical test of its resilience amid ongoing market turbulence.
So, Is Bitcoin a roller coaster or smooth sailing ahead? Place your bets.
Read Also: Here’s How Low Bitcoin Price Can Go? Top Analyst Weighs In
Read More: Why Crypto Market is Down Today? Here Are Top 5 Reasons
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