Sokipiriye Dokubo
Today, the price of Bitcoin is declining due to positive U.S. job data and a decrease in the amount of Bitcoin held by its biggest owners.
Bitcoin Price Fluctuation
Bitcoin (BTC) has dropped by about 3.25% in the past day, reaching $3,690 on June 8. Despite this decrease, BTC/USD is performing better than the broader cryptocurrency market, which has seen a 3.75% drop during the same time frame.
Factors Affecting Bitcoin’s Price Drop
1. Strong U.S. Job Data
The release of solid U.S. employment data for May is a major factor in Bitcoin’s price decrease. The nonfarm payrolls report indicated a gain of 272,000 jobs, surpassing all 77 estimates in Bloomberg’s economist survey. This robust job growth led to an increase in Treasury yields.
2. Market Response
The spike in Treasury yields affected various financial markets. The S&P 500 Index fell by approximately 0.3%, and the U.S. dollar strengthened. Higher bond yields typically signal increased borrowing costs, which can dampen investors’ willingness to take risks.
Bitcoin Whales Selling Off?
Another reason for Bitcoin’s price decline is a slight reduction in the BTC supply held by large holders, known as “whales”. These major holders, with at least 100,000 BTC, have decreased their holdings by 0.2% in the last 48 hours, indicating a potential redistribution or sell-off. Conversely, holders with 10,000-100,000 BTC and 1,000-10,000 BTC have been accumulating Bitcoin recently.
Technical Analysis: Resistance at $70,000
Bitcoin faced resistance around $70,000, triggering its recent decline. This level is crucial as it marks the neckline of Bitcoin’s inverse head-and-shoulders (IH&S) pattern, a bullish reversal setup. Breaking above this level could target a price exceeding $90,000, while a pullback may lead to a decline towards the 50-day exponential moving average (50-day EMA) at around $66,740.
Summary
In conclusion, Bitcoin’s price drop is influenced by strong U.S. job data, decreased BTC supply from major holders, reduced risk appetite due to rising bond yields, and challenges in surpassing key resistance levels.