Crypto market shakes as Bitcoin dips below $61K

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Bitcoin, the reigning monarch of the cryptocurrency world, continued its rollercoaster journey, plunging to $60,000 on Monday. The digital asset was last seen down over 4% at $61,211.00, as reported by Coin Metrics. Earlier, it dipped to $60,666.30, marking its lowest point in more than a month. Over the past week, Bitcoin has tumbled more than 8%.

The crypto market’s turbulence extended to digital asset investment products, which experienced a second consecutive week of outflows. Last week witnessed the lowest trading volumes globally for crypto investment products since the inception of U.S. Bitcoin ETFs in January.

In addition to the outflows, Bitcoin faced a surge in long liquidations, compelling traders to sell their assets at market prices to settle their debts. CoinGlass reported that in the past 24 hours, $97.83 million in long Bitcoin liquidations occurred across centralized exchanges.

The broader cryptocurrency market mirrored Bitcoin’s decline. Ether dropped 4%, Solana’s token fell 3%, XRP slipped 1%, and the meme token Dogecoin tumbled nearly 5%.

Last week, CryptoQuant predicted Bitcoin could slide back to $60,000 after breaking below the crucial support level of $65,800, citing a lack of bullish momentum. On-chain data from the company indicates traders have been reducing their holdings since Bitcoin reached $70,000 in late May and have yet to resume buying.

For the month, Bitcoin is down nearly 10%. It briefly touched the $71,000 mark at the start of June but has been on a steady decline since. The cryptocurrency has largely oscillated between $60,000 and $70,000 since mid-March, when it hit an all-time high of $73,797.68.

Despite the recent downturn, investors and analysts remain optimistic about Bitcoin’s long-term prospects.

Eleanor Gaywood, head of strategy at Coincover, noted that market jitters often precede the release of the personal consumption expenditure index, the Fed’s preferred inflation gauge, due this Friday. She suggested that signs of a rate cut in September could ease investor nerves and stabilize Bitcoin’s price.

“The Fed has indicated they need to see further evidence of inflation falling before they become more dovish,” Gaywood added. “Any macro data highlighting continued inflation decreases will likely support prices, while inflationary data will weigh on them.”

In the ever-volatile world of cryptocurrencies, Bitcoin’s journey continues to captivate investors, with many eagerly watching for the next twist in its unpredictable tale.

(Source: Coin Metrics | CryptoQuant | Coin Cover | Barron’s)

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