The cryptocurrency market experienced a rollercoaster ride this past week, with Bitcoin’s price plummeting by ten thousand dollars from Monday to Sunday morning. The week began with a positive surge as Bitcoin reached $70,000 for the first time since early June, following positive remarks by former President Donald Trump at a BTC conference. However, this upward trend was short-lived as BTC took a steep decline by four thousand dollars later in the week.
The US released its July jobs report which indicated a higher unemployment rate of 4.3%, the highest since October 2021. This led to negative reactions from both Wall Street and the cryptocurrency market. Bitcoin’s price dropped to $62,200 on Friday night as concerns about the US economy heightened. The continuous decline over the weekend was exacerbated by the ability to trade cryptocurrencies 24/7, resulting in Bitcoin falling to a three-week low of under $60,000.
The decisions made by central banks around the world also played a significant role in the cryptocurrency market volatility. The Bank of England cut interest rates by 0.25 basis points for the first time since the pandemic, echoing similar moves by other major institutions like the ECB and the Bank of Canada. In contrast, the US Federal Reserve has yet to follow suit and the interest rates remain at a multi-decade peak of 5.25% to 5.50%. The uncertainty surrounding the Fed’s next move, particularly in the face of mounting pressure, has caused some investors to leave the crypto market temporarily.
The reports of a weakening US economy and the unresolved status of the Federal Reserve’s actions have led to increased caution among investors, especially larger ones. This has been reflected in the significant outflows from spot Bitcoin ETFs, reaching nearly $240 million on Friday alone. Additionally, Ethereum ETFs have experienced continuous outflows for the second consecutive week. The impact of ETF flows on Bitcoin’s price has been evident in the past, with outflows exerting downward pressure on the asset’s value. This trend may have contributed to Bitcoin’s decline below $60,000 and the overall market turbulence.
The recent volatility in the cryptocurrency market can be attributed to a combination of factors, with the US playing a pivotal role. From economic data releases and central bank actions to investor behavior and ETF outflows, various elements have contributed to the fluctuations in Bitcoin’s price. As the market continues to navigate through uncertainty, it is essential for investors to stay informed and monitor these developments closely.
