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Why is Bitcoin’s Price Down Today and What’s Next?

The cryptocurrency market has experienced a significant decline today, with Bitcoin falling below its $71,000 support barrier to $68,500 and Ethereum dropping to $3,600.

The global cryptocurrency market cap decreased by 2.60% to $2.55 trillion, while the total market volume increased by 42.17% to $106.43 billion. Many are now questioning the factors behind this sudden market slump.

Reasons for the Market Decline

One major factor contributing to this decline is the recent release of the US Employment Situation Summary Report. This report indicated that 272,000 jobs were created in May, exceeding estimates. However, the unemployment rate rose slightly from 3.9% to 4.0%, sending mixed signals about the overall health of the economy.

Markus Thielen, head of research at 10x Research, suggests that while the employment report is significant, it might not be the primary cause of the crypto market dip. The cryptocurrency market saw a sell-off towards the end of Friday, leading Bitcoin’s price to drop without a clear reason.

Higher Non-Farm Payrolls and a Stronger Dollar

The growth in non-farm payrolls suggests a robust labor market, which could lead to higher interest rates from the Federal Reserve. Higher interest rates often result in a stronger dollar, reducing the appeal of riskier assets like cryptocurrency. The U.S. Dollar Index (DXY) has increased, indicating that the dollar is gaining value against other currencies. This increase generally causes investors to flee riskier assets such as Bitcoin, leading to a decline in their value.

The combination of a strong dollar and projected interest rate hikes has created a bearish sentiment in the cryptocurrency market. Investors are withdrawing from riskier assets, contributing to the recent market downturn.

What’s Next for Cryptocurrency?

Looking ahead, economists predict that a weaker employment report could result in lower interest rates, potentially pushing Bitcoin to new highs. Markus Thielen stated that if the upcoming Consumer Price Index (CPI) report shows inflation at 3.3% or lower, Bitcoin could reach new all-time highs.

As the market responds to these economic signals, it is crucial to monitor future central bank announcements and economic reports for more indications of market direction.

Bitcoin Price Outlook

Bitcoin is currently trading at $69,639, reflecting a slight increase of 0.05%. The pivot point, marked by the green line, is at $69,612. Immediate resistance levels are at $70,144, $71,083, and $71,923. These levels represent potential selling points if Bitcoin’s price rises. On the support side, the immediate level is at $69,107, with further support at $68,415 and $67,570, providing potential buying zones if the price declines.

The Relative Strength Index (RSI) is at 44.18, suggesting neutral market conditions. The 50-day Exponential Moving Average (EMA) is at $69,612, aligning with the pivot point and acting as a critical level for determining future price movements.

In conclusion, traders should watch for selling opportunities above $70,144 and buying opportunities below $69,107, closely monitoring these key levels for potential market shifts. The interplay of these technical indicators and economic signals will be crucial in shaping Bitcoin’s near-term price trajectory.

Read More: Why is Bitcoin’s Price Down Today and What’s Next?

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