Bitcoin’s price has been on a downward trend, dropping by 3% on Monday and falling below $62,000. This decline wiped out any gains the cryptocurrency had made the previous week, with the overall crypto market losing about 7% in value. Other major cryptocurrencies like ETH, ADA, and BNB also experienced losses of over 4%, while SOL dropped by 7% and memecoins collectively fell by 5%.
Analysts are attributing the continuous drop in Bitcoin’s price to miner selling activity, as miners continue to liquidate their rewards following the recent Bitcoin halving. In the past two weeks, whales and miners have sold over $1.2 billion worth of Bitcoin, and this number is expected to increase as more wallets sell off their reserves.
The steep decline in price also led to the liquidation of about $150 million worth of long positions on Monday. Long trades, which speculate on the price increase of Bitcoin, were forced to close as traders faced losses and lacked the necessary funds to cover the falling price. On the other hand, short bets that speculate on Bitcoin’s price decrease saw around $9 million in liquidations.
In addition to miner and whale activity, the German government’s sale of Bitcoin is also contributing to the cryptocurrency’s declining value. The German Federal Criminal Police Office recently sold around 3,000 Bitcoins seized from a piracy site in 2013 and still has about 47,000 more coins to sell. These assets are being liquidated through exchanges like Kraken and Coinbase.
The strong performance of the US dollar and investors shifting to less risky options such as the booming US technology index market have further limited Bitcoin’s momentum and caused its price to drop. As a result, Bitcoin ETFs listed in US markets have seen significant outflows, with over $1 billion moving out of these instruments in the past week.
Overall, Bitcoin’s price plummeting below $62,000 is a reflection of various factors at play in the cryptocurrency market. From miner and whale activity to government sales and investor sentiment, these dynamics are shaping the current trajectory of Bitcoin’s value. Investors will need to closely monitor these developments to navigate the volatile landscape of cryptocurrency trading.