FOMC

Bitcoin ETF

Bitcoin

Bitcoin’s daily chart has painted a stark picture with a massive red candle signaling a sharp 6% drop this Friday. The biggest cryptocurrency has plunged nearly 10% over the week, closing at $61,592 after an intraday recovery. 
Despite briefly reclaiming the $61,000 mark from a low of $60,433, the bearish tide has caused a ripple effect throughout the crypto market. Altcoins, including Ethereum, have also felt the impact, with Ethereum slipping under $3,000 and meme coins crashing. The market is reeling from a wave of <a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noreferrer noopener nofollow">liquidations</a>, with nearly $500 million in long positions wiped out in just 48 hours. 
<div class="wp-block-image"> 
 <figure class="aligncenter is-resized">
 <img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe4UYyK-T90svEv5jrkP6YSLf55R_wQ4KkfqSsxP41NvDB0weFeoZ77nNKyGUSBFBY3mEr-2YAOETmBzQZ45jknm0yD_vGKBwWHsu-RNhkLcKlLDb0FRs7aFf4yADlDbaQmqBpvqZls0KkyYAhS5cp9JkNj?key=p2lf-Ce-TdZNi1xueqYasA" alt="Coingecko" style="width: 100%;height:auto">
 <figcaption class="wp-element-caption">
 Source: <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">Coingecko</a>
 </figcaption>
 </figure>
</div> 
So what’s behind this sudden downturn? 
<ol> 
 <li>FOMC Meeting Delay Hits Hard</li> 
</ol> 
The Federal Open Market Committee (FOMC) meeting was a major event for the crypto market, initially fueling optimism due to a promising rally before the meeting and positive July Consumer Price Index (CPI) data. 
There was excitement about potential Bitcoin purchases by major U.S. pension funds through ETFs. However, the long-awaited rate cut was postponed, with no new decisions expected until September.&nbsp; 
<ol start="2"> 
 <li>Huge Bitcoin ETF Outflows</li> 
</ol> 
On August 2, Bitcoin ETFs saw a dramatic shift with net daily outflows reaching $237.45 million. Fidelity’s FBTC fund led the pack with a $104.1 million outflow, followed by Ark’s ARKB and Grayscale’s GBTC with outflows of $87.68 million and $45.95 million, respectively. The only exception was <a href="https://www.cryptotimes.io/2024/08/02/blackrock-continues-to-buy-bitcoin-amid-price-drop/" target="_blank" rel="noreferrer noopener">BlackRock’s IBIT fund, which saw a positive inflow</a> of $42.8 million.&nbsp; 
<ol start="3"> 
 <li>Mt. Gox Bitcoin Distribution</li> 
</ol> 
The ongoing distribution of Bitcoins by Mt. Gox to creditors has fueled the fire. Of the $9 billion due, $3 billion has already been sent to exchanges. This distribution has increased selling pressure, contributing to the market’s downturn. 
<ol start="4"> 
 <li>Declining Bitcoin Open Interest</li> 
</ol> 
Bitcoin’s Futures Open Interest has dropped by 5.17% in the past 24 hours, signaling a waning market confidence. The OI-weighted funding rate has also fallen sharply to 0.0085%. Despite this, Binance’s BTC/USDT Long-to-short ratio remains at 1.86, suggesting the market might see a rebound soon. 
The recent Bitcoin plunge highlights a convergence of factors—FOMC meeting delays, massive ETF outflows, and Mt. Gox Bitcoin distributions—causing a significant market shakeout. Despite a substantial dip, the market’s resilience, indicated by Binance’s long-to-short ratio, suggests a potential rebound. Could this downturn be a temporary setback, or is it the start of a more prolonged bearish trend? 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 Also Read: <a href="https://www.cryptotimes.io/2024/08/03/trump-suggests-bitcoin-as-solution-to-35t-national-debt/" target="_blank" rel="noreferrer noopener">Trump Suggests Bitcoin as Solution to $35T National Debt</a> 
</blockquote>

Bitcoin Dips 6%: Key Reasons Behind Today’s Decline

The Crypto Times

Other articles published on Aug 3, 2024

Cryptocurrency Market Experiences Significant Decline

‘Unregulated’ Crypto Betting Booms Ahead Of 2024 US Election On Polymarket

Can XRP Rally 1,000X Despite The Drop Below $0.6?

Middle East Influences Crypto Prices

WazirX Revises Crisis Strategy Following User Backlash

Degen Coin: Projected Growth and Future Prospects

Join our free newsletter for daily crypto updates!