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The second-worst weekly decline in Bitcoin history occurs as it drops 4% to $61,000. Why the sharp decline?

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The second-worst weekly decline in Bitcoin history occurs as it drops 4% to $61,000. Why the sharp decline?

 

 

The largest cryptocurrency in the world, Bitcoin, saw a decline of more than 3% on Monday, hitting a level of $61,000. The market is experiencing growing losses after experiencing its second-worst weekly decline since 2024, which was fueled by declining interest in Bitcoin exchange-traded funds and monetary policy uncertainty.
Bitcoin dropped 4% to $61,153 as of Monday at 11:44 a.m. London time, hitting its lowest level in more than a month. A six-day run of withdrawals from US ETFs that are focused on cryptocurrency has affected the top cryptocurrency by market value.

The market capitalization of cryptocurrencies is currently close to $1.2 trillion. Bitcoin’s open interest has increased by 0.59 percent despite the current market downturn, bringing its valuation to $19.1 billion.

“Many people are feeling uncertain and afraid about what to do next as a result of the current downturn in the cryptocurrency market. As we get closer to the tipping point, a lot of people will give up on Bitcoin. In many ways, Bitcoin is serving the same purpose as gold did in the early years of banking. Three main factors are to blame for the current decline: Germany is selling $3 billion worth of bitcoin; Mt. Gox, the former cryptocurrency exchange, announced that it will begin repaying bitcoin cash in July; and minors are selling bitcoin to fund their mining operations “said Avinash Shekhar, CoFounder & CEO, Pi42.

As a result of a number of factors that are reducing their risk appetite, investors appear to be taking a cautious approach and refraining from making bold moves, according to recent market sentiment. These elements have affected not just the price of Bitcoin but the market price of all cryptocurrencies combined.

Uncertainty surrounding the interest rate policies of the Federal Reserve has had a major impact on Bitcoin’s recent performance. Concerns about inflation are still present, so traders are cautious about prospective interest rate rises. Future Fed decisions will have a significant impact on market sentiment, particularly if they are influenced by economic indicators like the PCE price index.

“Due to certain bearish conditions, Bitcoin has recently had difficulty maintaining critical support levels. The market’s mood has soured as high-ticket transactions have sharply declined and ETF withdrawals have once again outpaced inflows. Most significantly, investors are shifting away from riskier assets and toward the dollar as a result of the dollar index’s strengthening against the backdrop of the US PMI hitting an optimistic 54.6. Further undermining investor confidence has been an influx of profit-taking, particularly from derivatives trades, according to Rajagopal Menon, VP of WazirX.

The withdrawal of $545 million from U.S. Spot Bitcoin ETFs is a significant indicator of a shift in investor sentiment toward digital assets. Institutional investors are reallocating their positions in Bitcoin-related investment products due to concerns about market volatility and regulatory uncertainties. ETF outflows are a significant contributing factor to the downturn in Bitcoin.

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Ahmed Mainul

My name is Ahmed Mainul Mondal, I'm the founder of the hospitality career profile website. I'm writing blogs and news posts as per user preferences.

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