Why did the price of bitcoin fall and where will it go next?

A wave of selling has pushed the price of bitcoin (BTC) back to $66,000 this Tuesday. This level, which is its two-week low, has acted as market support for the past three weeks.

In this sense, bitcoin is now in a key price zone which could act as a psychological floor, as shown below. However, if selling pressure intensifies, a deeper fall to previous supports between USD 65,000 and USD 60,000 is possible.

The current decline has been influenced by exchange-traded funds (ETF) of bitcoin in the United States. These instruments culminated on Monday with outflows of USD 65 million, after registering the longest streak of inflows in their history (19 consecutive days). This can be seen in the following graph.

In this way, ETF investors show a change in behavior, which may be the result of the approach of a key day for the markets. This Wednesday, June 12, the United States consumer price index (CPI) and the decision of the FOMC, the country’s Federal Reserve (Fed) meeting on interest rates, will be published.

As reported by CriptoNoticias, the market is waiting to see if Jerome Powell, president of the Fed, anticipates rate cuts for some time in 2024. A forecast of this is a message that can encourage demand for risk assets.

Currently, rates remain at 5.5%, their highest level in two decades. According to a poll of economists carried out -, the majority foresee two cuts starting in September 2024.

Bitcoin is facing a local minimum if history repeats itself

Markets tend to fall prior to announcements that generate uncertainty. Nevertheless, in the event of a CPI in line with expectations (3.4%) and a positive speech from the Fed, both stock stocks and bitcoin and cryptocurrencies could react upwardas on past occasions.

“Powell’s press conferences have been good for the market lately,” warns the investor known as Jelle. He notes that the last four FOMC events have coincided with local lows and 20% rallies for BTC, as the chart exhibits. Therefore, he believes that “a rebound could be closer than most people think.”

For the analyst Juan Rodríguez, The CPI and the FOMC decision define whether bitcoin goes to new all-time highs in the short term. Currently, the currency is trading at 10% of its record of USD 73,700 registered three months ago.

Bitcoin miners contribute to price drop

In addition to the wave of investor sales, there are movements by bitcoin miners that have contributed to the price drop.

“Bitcoin is suffering a rare mining capitulation,” said analyst Willy Woo. The specialist explained that this phenomenon This is the end of the miners who cannot continue due to situations such as the halvingan event that halves your rewards.

Woo details that, as these weak miners “die,” they get rid of their BTC, which promotes supply over demand. After this stage, there tends to be a price recovery, as the graph shows.

Consequently, this mining capitulation currently adds obstacles for bitcoin to rise. Although positive macroeconomic data, or even progress towards the launch of Ethereum ETFs, could offset these headwinds.