✔✔✔The recent significant decline in Bitcoin prices is primarily the result of a combination of changes in macroeconomic expectations, institutional capital behavior, and internal market sentiment.
Below are the main reasons for this round of decline, allowing you to quickly understand:
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Macroeconomic factors ✔ The expectation of a rate cut by the Federal Reserve has cooled, the dollar has strengthened, and the attractiveness of risk assets has decreased.
Institutional behavior and capital flow ✔ A large-scale net outflow of funds has occurred in the US spot Bitcoin ETF; companies like MicroStrategy that hold a significant amount of Bitcoin face the risk of being removed from major stock indices.
Internal market structure and sentiment "Whales" and early holders are selling; high-leverage positions are being liquidated in large volumes, amplifying the decline; market liquidity is decreasing, exacerbating volatility.
💡 Outlook for future trends
There are differing opinions in the market regarding the future of Bitcoin:
· Short-term support level: Some analyses suggest that the $74,000 - $84,000 range may form a key support. $74,000 is the average cost line for Bitcoin held by MicroStrategy, while $84,000 is the average cost for large ETFs (like IBIT). If prices decline further, these areas may be tested.
· Positive outlook: Some analysts believe that the current decline may lay the foundation for subsequent increases. BitMEX co-founder Arthur Hayes pointed out that if the Federal Reserve resumes loose monetary policy in response to risks, Bitcoin prices may rebound to higher levels by the end of the year. Fundstrat's Tom Lee also maintains a prediction that Bitcoin will reach $150,000-$200,000 by the end of the year.
· Cautious perspective: Some institutions maintain a cautious attitude. Research firm CryptoQuant believes that the current market conditions are the most pessimistic since the start of this bull market in 2023, and the peak demand of this cycle may have passed.
Overall, the Bitcoin market is in a sensitive period dominated by macro policies. The future price direction largely depends on the pace of the Federal Reserve's monetary policy and the return of institutional capital.
