Bitcoin Price Plunges 3.38%: What’s Behind the Drop?

Published by

Mustafa Mulla

July 3, 2024

Bitcoin has faced a setback recently, with its price dropping by 3.38% over the past day to settle at $60,780. The cryptocurrency experienced a 24-hour trading range between $60,584.34 and $63,151.44, leading to a dip in its market cap to $1.19 trillion.

Bitcoin’s market dominance also saw a slight decrease, falling by 0.46% to 53.18%. Several factors contributed to this decline:

Exchange Trends to Note

ETF Outflows

On Tuesday, the 11 U.S. spot Bitcoin exchange-traded funds saw total daily net outflows of $13.62 million, marking a return to negative flows after five consecutive days of inflows. Grayscale’s GBTC experienced net outflows of $32.38 million, while Bitwise’s BITB lost $6.76 million.

The overall trading volume for these 11 spot bitcoin ETF funds was under $1 billion, significantly lower than the daily volume of around $8 to $10 billion seen in March 2024.

Whale Movements

According to Whale Alert, a large holder or institution transferred 1,800 BTC, valued at $114 million, to Binance, causing Bitcoin’s price to drop from $63,800 to $62,900. This entity has been notably active, having previously withdrawn 6,725 BTC, equivalent to $437 million, from Binance and OKX.

Over the past five days, it transferred 3,481 BTC, worth $217 million, back to Binance at an average price of $62,300. Currently, the whale still holds 7,867 BTC, worth approximately $494 million.

Government and Miner Sales

German Government Liquidation

The German government has also been liquidating its Bitcoin holdings. On Monday, July 1, it moved over 1,500 BTC, with 400 BTC worth over $25 million sent to exchanges like Coinbase, Kraken, and Bitstamp. Since June, the total BTC selloff by the German government has reached over 2,700 BTC.

Miner Sell-off

In the past 72 hours, Bitcoin miners have sold over 2,300 BTC, valued at about $145 million. This increased selling pressure follows the fourth Halving event, which reduced block rewards from 6.25 BTC to 3.125 BTC, leading miners to sell to limit their losses.

What Next for BTC Price?

Despite the recent drop, there are optimistic predictions for Bitcoin’s future. Geoffrey Kendrick, Standard Chartered Bank’s head of forex and digital assets research, predicts that Bitcoin could hit its all-time high in August, followed by a rise to $100,000 by the time of the U.S. presidential election in November. He views Trump as “bitcoin-positive,” suggesting that both regulation and mining would be more favorable under his leadership.

Current Status

As of now, Bitcoin is trading at $60,760, reflecting a 3.51% decrease in the past 24 hours. Despite the drop, trading volume has surged, now hovering at $22.5 billion, with a market cap of $1.19 trillion.

With analysts predicting a $100,000 price tag, are you bullish on Bitcoin’s future?

Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.