- Bitcoin dropped below $61,000, causing over $260 million in long liquidations.
- Rising US unemployment rate (4.3%) spooked investors, leading to market downturns.
- Geopolitical tensions and Mt. Gox/Genesis Bitcoin distributions added pressure on Bitcoin prices
Bitcoin experienced a significant drop below $61,000, resulting in over $260 million in long liquidations. According to the post by a renowned crypto analyst, Ash Crypto, several factors have contributed to this sharp decline. Each of these factors plays a crucial role in the broader financial landscape.
Rising Unemployment Rate in the US, Strengthening Japanese Yen, and Interest Rate Hike
The recent rise in the US unemployment rate to 4.3% has spooked investors. Higher unemployment can signal a weakening economy, potentially leading to a recession.
As a result, both the stock market and the cryptocurrency market have seen a downturn. Investors are wary of holding riskier assets, contributing to Bitcoin's decline.
The Bank of Japan's decision to raise interest rates for the first time in 17 years has had a ripple effect across global markets. Previously, borrowing yen was essentially free, but the new interest rates have changed that dynamic.
Investors are now pulling money out of US equities and other risk-on assets to take advantage of the stronger Japanese Yen. This shift in investment strategies has added pressure on Bitcoin, leading to further sell-offs.
Fear of Global Conflict and Impact of Mt. Gox and Genesis Distributions
Geopolitical tensions have also played a part in Bitcoin's recent struggles. For the fifth time this year, fears of World War III have surfaced.
During times of uncertainty, investors typically move away from riskier investments like cryptocurrencies. This fear-driven behavior has contributed to Bitcoin's decline as people seek safer assets.
The ongoing distribution of Bitcoin from the Mt. Gox settlement and the recent start of the Genesis distribution have also influenced the market. Yesterday, Genesis sent over $1 billion worth of Bitcoin, which the market interpreted as a sign of an impending dump.
As the market digests these events, some analysts believe that the Federal Reserve might react with rate cuts. Meanwhile, market data signal BTC's potential rally to the upside as whales accumulate more coins daily.
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