Bitcoin takes a sharp fall: the cryptocurrency loses $60,000 and the fear index hits 2023 lows

Bitcoin takes a sharp fall: the cryptocurrency loses ,000 and the fear index hits 2023 lows
Bitcoin takes a sharp fall: the cryptocurrency loses ,000 and the fear index hits 2023 lows

Macro news and a news item affecting the sector have had a major impact on cryptocurrency prices. Which ones are showing the biggest declines?

The market of the cryptocurrencies is suffering a strong attack in the last hours. Bitcoin continues in the red and has already lost $60,000, with a drop of more than 4.8% reaching $57,000. Meanwhile, Ethereum drops almost 5% in the last 24 hours.

The rest of the cryptocurrencies fell up to 12% led by Chainlink, followed by Shiba Inu (-10.7%), Dogecoin (-10.7%), Tonecoin (-8.9%) and Polkadot (-8.5%).

What’s happening in cryptocurrencies?

According to various experts, the sentiment of investors is at a minimum. Recently, the Crypto Fear and Greed Index (‘Crypto Fear and Greed Index’, in English) fell to 30 points, indicating a clear situation of “fear” in the market, that is, that Investors are not at all convinced of the short-term potential of digital assets; at the moment, this reference is at 40 points. This data is the Worst since September last year and is dangerously close to the levels seen during the final stages of 2022, when the crypto winter finally took hold in the market following the collapse of FTX in November.

The reason, they explain, could have to do with the Mt. Gox Rebate Program. Those responsible for overseeing this process announced that in July they would begin returning to users the more than 140,000 BTC, valued at around 9 billion dollars, stolen during a cyber attack in 2014. The market fears that this will cause a excess supply in the market that drives down prices, since the tokens stolen from these investors have multiplied their value by more than 100 times: BTC closed 2014 at $320.

The data shows that this fear is real. According to CoinGlass, Futures operations betting on higher prices lost more than 230 million in the last few hoursthe highest amount since late June. Some analysts point out that this could be favourable for investors, as leverage is being eliminated from the market and, consequently, short-term volatility should fall.

Whatever the case, the truth is that the events of the last few days seem to have dashed hopes that July would be a bullish month for Bitcoin. Historically, the seventh month of the year has been positive for the leading cryptocurrency, especially after a particularly bearish June like the last one. However, analysts such as those at QCP Capital predict a third quarter of “moderate” returns due to the “uncertainty” that prevails in the market at the moment.

How the latest macro news impacts Bitcoin

On the macroeconomic scene, the minutes of the June meeting of the Federal Reserve (Fed), document in which members of the Federal Open Market Committee (FOMC) They asked for “patience” with interest rates until inflation approaches 2%.

The latest data has been quite positive and seems to have increased the possibility that the Fed will consider a cut in September and another at the end of the year, although the big event of the week will be tomorrow with the official employment report for June. The forecast is for non-farm payrolls to fall significantly, which could support this thesis.

Source: Ambito

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