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▲ Bitcoin (BTC), S&P 500/AI generated image
Bitcoin (BTC) has fallen by $4,000 from its peak a week ago, plummeting to its lowest level in ten days. Interest rate uncertainty, weakness in risk assets, and outflows from spot ETFs simultaneously pressured the market.
According to crypto media outlet Cryptopotato on July 28 (local time), Bitcoin failed to break above $65,600 at the beginning of the week. It subsequently dropped to $63,000. This is a $4,000 decline compared to the $67,000 recorded a week ago.
The first reason is caution ahead of the Federal Open Market Committee (FOMC) meeting. The U.S. Federal Reserve (Fed) was expected to keep the benchmark interest rate at 3.50-3.75%. However, the market priced in about a one-third chance of a surprise interest rate hike. Investors reduced their exposure to risk assets ahead of the monetary policy announcement.
The second reason is the synchronized weakness in global risk assets. The KOSPI recorded a double-digit decline, falling from 6,767 to 6,023. Japan's Nikkei 225 index also fell by over 4%, from 64,800 to 62,365. Nvidia and Micron dropped by up to 5%. Gold prices also fell by over $100 within hours after peaking near $4,120.
The third reason is the continuous net outflow from Bitcoin spot ETFs. On Monday, the net outflow was less than $12 million, not larger than in June. However, after $225 million was withdrawn last Thursday, over $240 million exited on Friday. The three-day consecutive outflow of funds suppressed investor sentiment.
Crypto analyst Ali Martinez suggested the possibility of significant price volatility, noting that the Bollinger Bands had narrowed as of the 3rd. Ted Pillows identified $62,000 as a key support level, predicting that if this support breaks, further declines below $60,000 could occur. CW analyzed that some whales are quickly repurchasing sell-offs after the decline. The key variables determining short-term volatility are the FOMC outcome and the press conference by Fed Chairman Kevin Warsh.
[Article Summary]
-Bitcoin fell by $4,000 from its peak a week ago, dropping to $63,000, its lowest level in ten days.
-FOMC uncertainty, global risk asset weakness, and net outflows from Bitcoin spot ETFs increased downward pressure.
-The market views the sustainability of the $62,000 support level and the FOMC outcome as key variables determining the next direction.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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