Bitcoin Price Decline: Is the Bear Market Dominating?

Bitcoin has been facing challenges in its price recovery following a recent decline. Since June 5th, Bitcoin’s value has dropped from $71,083 to $60,600, marking a decrease of over 16%. This significant drop has left many in the cryptocurrency community pondering the reasons behind Bitcoin’s struggle to bounce back.

A leading blockchain analytical platform, Lookonchain, revealed that Bitcoin ETFs are experiencing continuous outflows. On June 28, nine ETFs collectively witnessed an outflow of 4,428 Bitcoin, equivalent to around $271 million. Notably, Grayscale (GBTC) led the outflows with 3,375 BTC, followed by ARK Investment with 720 BTC. This substantial selling pressure has impacted market dynamics, affecting the stability of Bitcoin’s price.

Despite the outflows, there was a net inflow of 596 Bitcoin, valued at approximately $36.49 million, into Bitcoin ETFs. This indicates a mixed sentiment within the ETF market, with some entities divesting their Bitcoin holdings while others are still acquiring.

Amidst the latest U.S. macroeconomic data, Bitcoin’s price has remained relatively stable. The core Personal Consumption Expenditures (PCE) price index, a key metric for inflation monitored by the Federal Reserve, saw a modest annual increase of 2.6% in May, the lowest since March 2021. The monthly core PCE showed a minimal rise of 0.1%, the slowest uptick since November 2023. Despite these low inflation figures, Bitcoin continues to hover around the $60,000 threshold with little reaction.

In addition to inflation indicators, recent actions by the U.S. government have introduced uncertainties into the market. A government-associated address transferred 11.84 BTC, valued at approximately $726,000, to a new address, sparking speculation about potential larger government movements. Such actions can instill unease among investors, leading to concerns about significant sell-offs that could exert downward pressure on Bitcoin prices.

Market analyst Willy Woo has expressed apprehensions regarding Bitcoin’s weakening support below the $60,000 level. There are warnings that a failure to sustain this price point could trigger a notable bearish momentum, potentially driving Bitcoin’s value down to $54,000. Recent price retests at $58,000 have been attributed to liquidations of leveraged positions and selling pressure from miners, indicating that the market may still be vulnerable to further declines.