Why is Bitcoin Price Falling Sharply Today
Bitcoin’s (BTC) price has fallen sharply in the last hour, dropping below the $70,000 support level. The steep decline can be linked to several factors, including robust US employment data and a decrease in GameStop’s share price, which has had a negative impact on the mood in the cryptocurrency market.
This dramatic decrease has led to the liquidation of more than $300 million from the cryptocurrency market within the past one hour.
Bitcoin Price Market Indicators
Consequently, the current crisis can be seen in Bitcoin’s market indicators. The Bitcoin Dominance metric, which indicates the percentage of the total cryptocurrency market capitalization that belongs to Bitcoin, rose by 1.04% to 53.69%. This indicates that although Bitcoin is going through a retracement, it is still performing much better than the rest of the cryptocurrencies.
Furthermore, the exchange reserve of Bitcoin fell by 0.06% to 1.81 million, suggesting that investors may be withdrawing Bitcoin to personal wallets for holding and not selling on exchanges.
The Crypto Fear & Greed Index, which shows the market sentiment, decreased by 1.28% to 77, meaning that the market sentiment is still in the ‘Greed’ territory. However, extreme greed is usually the last phase of a bull market and is apparent in the present situation.
Source: Coinglass
In addition, the CME BTC Futures Open Interest dropped by 2.19% to $11.12 billion, indicating that traders are closing their positions, which could be due to less confidence in the market or a consolidation period after recent volatile price action.
Strong U.S. Employment Data
The recent US employment situation report also put negative pressure on Bitcoin price as it revealed that 272K jobs were added in May, much higher than the expected 185K jobs.
Consequently, the higher employment numbers have lessened the chances of the Federal Reserve’s interest rate cut in the near future, which has led to an increase in interest rates and the U.S. dollar.
This change in the economic landscape has posed negative pressure on the risk assets including the cryptocurrencies.
GameStop Shares and Crypto Market Sentiment
At the same time, a significant drop in the GameStop shares (GME) also affected the sentiment in the cryptocurrency market negatively. According to Coingape the situation was precipitated by Roaring Kitty, a trader who has a large following on social media platforms, through a live session on YouTube.
As expected, Roaring Kitty did not have much to say and this made the investors rather disappointed. GameStop shares were down by 40% during the session, and the GME meme coin was down by 50%. This type of bearish trend also affected other meme cryptocurrencies such as DOGE where the price dropped by 8%, SHIB which fell by 10% and PEPE by 15%.
Despite the recent selloff, spot Bitcoin ETFs have been on their longest accumulation streak since their launch. Over an 18-day streak, these ETFs accumulated more than 56,000 Bitcoins, nearly seven times the amount mined during that period. However, this was insufficient to sustain a rally in Bitcoin’s price.
Source: CoinMarketCap
At press time, Bitcoin price was trading at $69,000, down 2.5% over the past 24 hours. Concurrently, BTC’s market capitalization declined by 2.52% to $1,362,313,410,346, while the 24-hour trading volume surged by 48% to $36,296,396,359.
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