Bitcoin’s price is struggling to recover from its recent decline. Since June 5th, Bitcoin has dropped from $71,083 to $60,600, reflecting a decline of more than 16%. This significant drop has left many in the crypto community wondering why BTC is having such a hard time recovering and what the primary reasons are behind its continued decline.
Bitcoin ETF Continues Its Outflow
Lookonchain, a prominent blockchain analytical platform, reported that outflow from Bitcoin ETF continues. On June 28, nine ETFs collectively saw an outflow of 4,428 Bitcoin from their portfolios, worth approximately $271 million. Grayscale (GBTC) led the outflows with 3,375 BTC, followed by ARK Investment with 720 BTC. This substantial selling pressure has influenced the market dynamics, affecting Bitcoin’s price stability.
Despite the outflows, Bitcoin ETFs also experienced a net inflow of 596 Bitcoin, valued at around $36.49 million. This indicates that while some ETFs are selling off their Bitcoin holdings, others are still buying
Cooling PCE Data
Despite the latest U.S. macroeconomic figures, Bitcoin’s price has remained relatively stable. The core Personal Consumption Expenditures (PCE) price index, which the Federal Reserve uses to gauge inflation, rose at an annual rate of 2.6% in May, marking the lowest increase since March 2021.
Monthly, the core PCE saw a slow rise of only 0.1%, the slowest since November 2023. However, Bitcoin continues to trade around the $60,000 mark, showing little reaction to these low inflation numbers.
Government Moves Add to Market Uncertainty
In addition to inflation data, recent actions by the U.S. government have contributed to market uncertainties. A U.S. government-associated address transferred 11.84 BTC, worth approximately $726,000, to a new address.
Although this is a small transaction, it has sparked speculation about potential larger moves by the government. Such actions can create unease among investors, who fear possible large-scale sell-offs that could put downward pressure on Bitcoin prices.
Is Bitcoin Gonna Plunge More?
Market analyst Willy Woo has expressed his concerns about Bitcoin’s weakening support below the $60,000 mark. They warn that if the price fails to hold this level, it could trigger a significant bearish momentum, potentially driving the price down to $54,000.
Woo has pointed out that recent price retests at $58,000 are due to liquidations of leveraged positions and selling pressure from miners. This suggests that the market has not yet fully recovered from the downtrend and may still be vulnerable to further declines.
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