Bitcoin price drops below $57,000 for 4 reasons

Bitcoin (BTC), the cryptocurrency, has experienced a dramatic drop. It fell to just $56,556 in Europe on Wednesday morning, its lowest level since February. The sharpest decline in a month since November 2022 has occurred with BTC falling approximately 7.5% over the past 24 hours, and breaking the $60,000 resistance late Tuesday.

# 1 Derisking Today before the FOMC Meeting

The anticipation and anxiety is high. financial The circles are the Federal Open Market Committee (FOMC) Today, the Bank of England is scheduled to release its rate announcement. The event is important because the cryptocurrency market has become more reactive to macroeconomic indicators, particularly Bitcoin.

The Federal Reserve has reduced the expectations for interest rate reductions by a significant amount due to recent data that shows a slower GDP growth and persistent inflation. “Bitcoin and other risk assets are currently feeling the pressure from a stagflationary environment, geopolitical tensions, and seasonal liquidity variations,” remarked Ted TalkingMacro.

The market has now priced in just one possible cut to interest rates by December 2024. The Fed’s position is being challenged by the rising inflation rate data. This could lead to Jerome Powell becoming more conservative.

“For the first time in recent memory, the market is calling the Fed’s bluff, quickly front-running the idea that the Fed may not cut at all in 2024,” Noted Ted

2nd Cyclical Bitcoin correction phase

After an extraordinary rally that began the year, the market has entered a phase of natural correction. Charles Edwards founded Capriole Investments before the crash. noted: “We are a day short of breaking the record set in 2011 for days without a meaningful dip [-25%],” Bitcoin’s extraordinary performance over the past few months is worth highlighting.

Scott Melker also called “The Wolf Of All Streets,” Highlight technical indicators which suggest an imminent correction. “Broke and retested range lows as resistance. […] My biggest concern I have been discussing for months [was] that RSI never made the trip to oversold. Almost there now, all lower time frames oversold. This is still ONLY A 23% correction, very shallow for a bull market and consistent with other corrections on this run. We are yet to see a 30-40% pull back during this bull market, like those of the past.”

$BTC Daily

As resistance, the range’s lows were broken and tested again. There was nothing but air on the chart until about $52,000.

The biggest problem I’ve been talking about for several months now (in the newsletter) is RSI.

All time frames below are now oversold.

This… pic.twitter.com/5YZTWipBo8

— The Wolf Of All Streets (@scottmelker) May 1, 2024

#3 Profit-Taking

After substantial gains, traditional financial markets and investors take advantage to make profits. TradeFi/Boomers taking profit: CME Open Interest The amount of coins is dropping rapidly. April 29th, 135,6k, and April 30th, 123,9k. It peaked at around 170.4k (March 20th).” Crypto analyst RunnerXBT explained.

This confirms that investors are taking profits after significant events, such as ETF approval. Bitcoin halving. “That […] confirms my thesis that a lot of these guys longed in October 2023 because of ETF approval and BTC halving, trade played out and now they are taking profits (yes they are still up a lot), because they longed BTC not dead altcoins.”

Profits for TradFi/Boomers✅

CME Open interest is declining rapidly
On April 29, 135,6k coins will be minted
The 30th of April will see 123.9k coins.

Around 170.4k Coins (March 20th).

That at least for me confirms my thesis that a lot of these guys longed in October 2023 because of ETF approval… pic.twitter.com/M8KY1NfCtK

— RunnerXBT (@RunnerXBT) May 1, 2024

Hong Kong and US ETFs: A Disappointment?

As recent events in the US and Hong Kong markets have proven, there are significant tensions surrounding spot Bitcoin exchange-traded funds. Bitcoin ETFs in the United States have seen significant outflows. This indicates a cooler investor sentiment.

Recent studies have shown that dataThe total amount of outflows for US Bitcoin spot ETFs was $161.6 Million. Grayscale Bitcoin Trust, (GBTC), experienced outflows totaling $93.2 Million, whereas Fidelity, Bitwise, and Fidelity registered outflows amounting to $35.3 and $34.3 millions, respectively. BlackRock experienced zero net flow once more. These figures suggest that institutional investors are retreating, which is a sign of a decrease in price volatility.

The debut of Bitcoin ETFs in Hong Kong Also fell far short of expectations. Six newly-launched ETFs aimed at capturing both the Bitcoin and Ethereum markets reached only $11 million of trading volume. This is a far cry from their $100 million target. Trading volume for spot Bitcoin ETFs was $8.5 million. It was a far cry from the $655 million in trading volumes for US-based Bitcoin ETFs that were recorded on their launch day.

#5 Long Liquidations

Long liquidations have also had a significant impact on the market, as $451.28 millions worth of assets were liquidated over just 24 hours. According to, the largest liquidation on OKX was a ETH-USDT swap valued at $6.07million. However, Bitcoin liquidations totaled $143.04million. data CoinGlass. This liquidation has increased the pressure to sell Bitcoin.

BTC was trading at $57,715 as of press time.

Featured Image from iStock. Chart by TradingView.com

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