Bitcoin (BTC) has experienced a sharp decline, dropping below the $61,000 level after failing to hold support above $60,000. Analysts warn that if Bitcoin cannot maintain its critical support at $56,000, a major correction could follow.
Bitcoin Struggles Amid Cooling PCE Data
Bitcoin's price has shown little reaction to recent U.S. macroeconomic data. The core Personal Consumption Expenditures (PCE) index—the Federal Reserve’s preferred inflation gauge—rose just 2.6% year-over-year in May, the slowest pace since March 2021. Monthly core PCE growth also slowed to 0.1%, the lowest since November 2023. Despite these subdued inflation figures, Bitcoin continues to trade near $60,000.
Econ Friday
PCE data came in cooler than expected.
Personal income slightly higher, but spending is cooling.
— Skew Δ (@52kskew)
Adding to market uncertainty, a U.S. government-linked address recently transferred 11.84 BTC (~$726,000) to a new wallet. While small, such moves can fuel speculation about larger sell-offs, potentially pressuring Bitcoin’s price.
Analysts Warn of Thin Support Below $60,000
Market experts highlight weakening support below $60,000. A breach could trigger a bearish momentum, dragging prices toward $54,000. CryptoQuant identifies $56,000 as a key support level; failure to hold it may precipitate a steep decline.
Analyst Willy Woo attributes recent retests of $58,000 to leveraged position liquidations and miner sell-offs, suggesting the market hasn’t fully stabilized.
Declining Demand and Market Activity
Bitcoin’s drop is further driven by reduced demand from long-term holders and U.S. investors. Long-term BTC holders have sold ~160,000 BTC ($10B) in May and 40,000 BTC in June, per IntoTheBlock. This sell-off aligns with Bitcoin’s price volatility.
Trading volume fell 12.84% to $39.92B, signaling lower liquidity and higher volatility. Open interest (outstanding derivatives contracts) dropped 1.94% to $31.74B, though options open interest rose 2.18% to $10.24B—possibly reflecting market uncertainty.
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FAQ
What caused Bitcoin’s sudden price drop?
Bitcoin’s decline stems from weakening support below $60K, leveraged position liquidations, and reduced demand from long-term holders. U.S. macroeconomic data and government-linked transactions also contributed to market uncertainty.
How low could Bitcoin’s price fall?
If $56,000 support fails, analysts warn of a drop to $54,000. CryptoQuant highlights $56K as a critical level to watch.
Is trading volume affecting Bitcoin’s price?
Yes. Trading volume fell 12.84%, indicating lower liquidity. Reduced open interest (-1.94%) suggests fewer new positions, while rising options interest (+2.18%) points to heightened uncertainty.
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Keywords: Bitcoin price drop, BTC support levels, PCE data impact, crypto market analysis, long-term holders, trading volume decline
Disclaimer: This content reflects market conditions and the author’s analysis. Conduct your own research before investing. Neither the author nor the publisher is liable for financial losses.
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