Key reasons why Bitcoin dropped below $58,000
Bitcoin (BTC), the foremost digital currency by market size, experienced a downturn in its value during Sunday's trading activities. This downtrend extended into Monday, with Bitcoin touching a daily low of $57,663.
As of the latest update, BTC's value had dipped by 2.09% over the past 24 hours, landing at $59,450, a decrease from its Thursday peak of $62,755.
Insights from blockchain analysis company Lookonchain indicated that a pause in purchases by institutional investors might have contributed to this decline.
Lookonchain shared via a tweet that it appears institutional buying has paused momentarily, resulting in a 4.5% decline in BTC's price today. It was observed that two days ago, these institutions ceased acquiring USDT from Tether Treasury for exchange transfers.
Blockchain data pointed to a notable rebound in Bitcoin's value to $62,755 on Thursday, which likely initiated a wave of profit-taking. Blockchain intelligence firm Santiment commented that Bitcoin soared past $62,600, marking a +25% increase in barely over three days, catching the average traders by surprise.
Santiment further suggested that the sudden surge in optimism for potential $70,000-$75,000 BTC prices could indicate a peak for BTC.
A downturn in Bitcoin (BTC) set off a widespread sell-off across the cryptocurrency market over the weekend, as traders looked for signs to recalibrate their strategies in anticipation of a hectic week.
With the U.S. economic outlook still clouded with uncertainty, market participants are on the lookout for upcoming inflation figures.
The producer price index for July, which measures the average change over time in the selling prices received by domestic producers for their output, is expected on Tuesday. This will be followed by the consumer price index for the same month on Wednesday.
Again, the decline in Bitcoin's value instigated a broad crypto market retreat over the weekend as traders searched for cues amidst a packed week.
Investors are keenly awaiting the inflation data amidst growing concerns over a potential U.S. recession and debates on whether the Federal Reserve should have begun reducing interest rates earlier to soften the economic landing.
During its last meeting, the Fed held interest rates stable but hinted at a possible rate reduction in September, contingent on upcoming economic data, especially regarding inflation and the labor market's state.
