Bitcoin price continues to face selling pressure, as 87% of Bitcoin holders remain in profit, indicating potential for further profit-taking.
Bitcoin Price Drops Below $65,000
The Bitcoin (BTC) price has been under constant selling pressure, now falling below the crucial support level of $65,000. Despite a rally in the US stock market, Bitcoin has corrected 10% from its June high of $72,000. Over the past week, BTC has underperformed compared to the US stock market, reaching one-month low levels due to the lack of new catalysts.
Bitcoin vs. Equity Performance
In the last two weeks, Bitcoin and the overall crypto market have been declining as excitement over the Ethereum ETF approval fades. Data from IntoTheBlock shows that one major reason for profit-taking is the nearly doubled crypto market during Q4 2023 and Q1 2024. Additionally, other sellers have also weighed down on the BTC price.
Miners and ETF Outflows Increase Selling Pressure
In June alone, Bitcoin miners have liquidated over 30,000 BTC worth $2 billion. This selling is largely due to increased operational costs and reduced profits following the recent Bitcoin halving. Consequently, miners have been compelled to sell their BTC holdings.
Alongside miners, there is additional selling pressure from significant Bitcoin ETF outflows, which have surpassed $500 million over the past week. Moreover, the German government has been sending large amounts of BTC from its holdings to exchanges, likely indicating sales. The government still holds 47,000 BTC worth $3 billion in reserves.
Potential for Continued Selling
Despite the current sell-off, more than 87% of Bitcoin holders are still in profit, suggesting there is room for further profit-taking in the market. Many market analysts predict that Bitcoin price consolidation may continue until the end of summer 2024. The next major Bitcoin bull run is expected to start around September, with significant activity anticipated around the US elections.
Upcoming Economic Indicators
Next week, the focus will be on the release of the PCE price index for May, scheduled for Friday. A decline in the core CPI for May suggests potential downside risks for the core PCE index. Additionally, spending might face downside risks due to weak retail sales, though personal income could improve, as indicated by stronger-than-expected average hourly earnings.
