Bitcoin (BTC) has experienced a sharp decline, falling over 4% in the past 24 hours to around $58,000, erasing much of the previous week’s gains. This drop has triggered losses across the broader cryptocurrency market, with major tokens like Ether (ETH), Solana (SOL), Cardano (ADA), BNB Chain (BNB), and Ripple’s XRP also seeing declines.
Impact of U.S. Economic Data on Crypto
The recent sell-off in Bitcoin followed the release of the July U.S. Consumer Price Index (CPI) figures. The CPI increased by 2.9% year-on-year, marking the first time since 2021 that inflation has dipped below 3%. Despite a late recovery in traditional markets like the NASDAQ and S&P 500, Bitcoin continued to decline, highlighting its sensitivity to U.S. economic data.
According to K33 Research, crypto prices have become “highly sensitive” to economic indicators, with investors favoring stability over riskier assets like cryptocurrencies. As a result, some traders are predicting a further drop in Bitcoin’s price, potentially reaching as low as $55,000 in the near term.
Potential for a Bitcoin Rebound
Despite the current downtrend, there are signals that Bitcoin could rebound soon. Alex Kuptsikevich, a senior market analyst at FxPro, suggests that if data supports the Federal Reserve’s easing of monetary policy, it could trigger a bullish reversal. This could see Bitcoin rise to $66,000, overcoming its short-term downtrend.
ETF Movements Reflect Market Sentiment
The U.S.-listed spot Bitcoin exchange-traded funds (ETFs) saw significant net outflows of $81 million on Wednesday, ending a brief two-day positive streak. Grayscale’s GBTC led the outflows with $56 million, while Fidelity’s FBTC and other major ETFs also experienced losses. However, some ETFs, like Franklin Templeton’s EZBC and BlackRock’s IBIT, managed to secure a cumulative $6 million in net inflows.
Ether (ETH) ETFs performed better, with $10 million in net inflows over three days. BlackRock’s ETHA recorded $16 million in inflows, while Grayscale’s ETHE saw $16 million in outflows, demonstrating a mixed sentiment in the crypto ETF market.
