Bitcoin price saw a sudden downfall on Friday as bullish momentum fades up in the last 24 hours. After the favorable US economic data including CPI inflation and retail sales report, traders have turned bullish on Bitcoin. Some investors believe this could be the last time to buy the dip.
However, Bitcoin options expiry became a major headwind in the rally. Meanwhile, the crypto market fear & greed sentiment index has dropped from 29 to 27 (fear).
Bitcoin Price Dropping Despite Macro Sentiment Improved
The recent macro events such as an increase in retail sales and cooling PPI and CPI inflation in the US have turned investors’ sentiment bullish. This makes the U.S. FOMC Committee to consider starting rate cuts soon, with the market expecting Fed rate cuts to start in September.
CME FedWatch tool data indicates a 71.5% probability of a 25 bps rate cut in September after the recent macroeconomic data. The data still shows odds of 100 bps rate cuts by the Fed this year.
US stock market futures were mostly flat on Friday as investors believe a strong recovery this week. Data showing the resilience of the US economy, including inflation, jobless claims, and retail sales, has helped US stocks post their best week of the year.
John Stoltzfus, chief investment strategist at Oppenheimer, says, “Perhaps the Fed Chair is talking the talk and walking the walk,” as he expects three interest rate cuts from the central bank by the end of the year.
What Is Causing Sudden Drop in BTC Prices
Bitcoin price fell suddenly in the US hours primarily in response to the volatility surrounding the crypto market expiry. As reported by CoinGape, 24,000 Bitcoin options of notional value $1.4 billion expired today, with a put call ratio of 0.83. The max pain point is $59,500, which is higher than the current price of $57,853. This means traders positions were liquidated.
Moreover, Coinglass data indicates total BTC futures open interest dropped 1% in an hour on CME and Binance. Traders made their last Bitcoin price sell decision before the CME market closes today.
The liquidation data indicates that $210 million in crypto were liquidated in the last 24 hours, with $25 million in the last hour. BTC recorded more than $5 million in liquidation in an hour and $75 million in the last 24 hours.
The price is facing resistance at the descending trendline in the 1-hour timeframe. A slight push could turn the ball in the favor of bulls. However, the risks of falling are higher. BTC price analysis by CoinGape indicates the price can fall to $54,000.
As per 10x Research report, Bitcoin could retreat into the trading zone between $50,000 and $60,000. On the upside, Bitcoin price today is facing strong resistance in the range between $60,000-$61,000. Moreover, other fears surrounding Bitcoin selloff by the US government and hedge funds returning to the Yen carry trades are also impacting price action today.
BTC price rebounded from the $57K level but still trading under selling pressure in the past 24 hours, with the price currently trading at $58,603. The 24-hour low and high are $56,161 and $59,348, respectively. Furthermore, the trading volume has increased by 9% in the last 24 hours.
The post Why Is Bitcoin Price Down Today? appeared first on CoinGape.
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