Why Is BTC Stuck Below $58K?
Bitcoin price has been stuck below $58,000 for a long time. Despite being in a bull market, Bitcoin is not trending higher, and both market and non-market factors are to blame.
The impact of the US CPI
The US Consumer Price Index (CPI) rose 3% in June. Analysts see this as a bullish sign for Bitcoin, but the price is not rising. If the US central bank lowers interest rates, the incentive for fixed-income investments will decrease, and people will seek higher-income investments.
Chris Larkin, managing director of trades and investments at E-Trade, told CNBC that the Federal Reserve (Fed) is “one step closer to a September rate cut,” especially since real average hourly earnings for workers fell 3.9% from the previous quarter. year.
The labor force participation rate also increased slightly to 62.6 percent in June from 62.5 percent in May. Despite the data pointing to a higher chance of a price drop, with 90% consensus on at least one 0.25% drop in September, Bitcoin's price remains below $60,000. Meanwhile, the S&P 500 stock market index is 0.5% below its all-time high, and gold is trading 1.2% below its May 2024 high of $2,450. Even the Russell 2000 small-cap index, the 1000, does not include the largest U.S. Companies, rose 3 percent on July 11.
German government BTC sale
The German government continues to dump around 50,000 bitcoins seized in 2013. These are worth nearly $3 billion. According to Watcher Guru, the German government now has only $285 million in remaining BTC.
Price analysis
Because of these issues, the market feels like a bear market even though it is in a bull market. BTC is currently at $57,412, with an RSI value of 48.30. The Bitcoin chart shows a major rejection at $59,500, a strong resistance zone where the MA100 is also located. This 3.87% decline pushed BTC into the triangle zone, indicating that the bears are currently holding a strong base.
Bitcoin's market cap has dropped to $1.1 trillion, worrying investors. Sources suggest that as retail investors face selling pressure, BTC Wells and Sharks are piling up. Once the German government finishes selling BTC and the Mt. Gox payment pressure will ease, the market may stabilize. It may take another 1-2 months until everything settles down.
