Why did Bitcoin fall below $58,000?

Bitcoin (BTC) starts this Thursday, July 4th with a price less than 57,000 dollars. Since the first days of May, the digital currency created by Satoshi Nakamoto has not reached such high levels in its price.

In the following chart, provided by TradingView, you can see the Bitcoin price since Marchthe month in which it reached its most recent historical high above $73,000.

BTC’s fall can largely be explained by looking at money flows to and from bitcoin ETFs in the United States. According to the following chart, taken from the SoSoValue platform, Both yesterday and Tuesday, these financial products had “red” days in which capital outflows exceeded net inflows..

Bitcoin spot ETFs, unlike futures ETFs, are backed directly by BTC. This means that the management companies of these funds can buy and sell bitcoin on the market as required. For this reason, If capital leaves ETFs, it could mean that bitcoin is released into the market, increasing supply over demand.. This is bearish for the price of the financial asset.

Added to this is that Governments such as the US and German have been partially selling seized bitcoinOn-chain analytics firm Arkham just reported on its X account: “In the last 2 hours, the German government has moved 1,300 BTC ($76 million) to exchange deposits on Kraken, Bitstamp, and Coinbase.”

Also, it would be The release of 140,000 bitcoins that were held by the bankrupt exchange Mt. Gox for around 10 years is imminent.. This creates some fear in the market and many investors, perhaps, prefer to stay without exposure to BTC for the moment.

For all these reasons, Bitcoin is approaching the key $56,000 zone. As CriptoNoticias has detailed, this is a strong support level.

What happens in the next few hours and days will be crucial in determining the short-term trend of bitcoin. If the price rebounds upwards at this point, bitcoin could continue in the lateral range in which it has been since March. On the other hand, If it breaks down, it could be considered to have entered a downtrend..

While bullish expectations for Bitcoin remain in the medium and long term (which will likely take it to new all-time highs by the end of 2024 or beginning of 2025), days of high volatility can be expected.