Leading cryptocurrency Bitcoin (BTC) experienced significant declines in October and November, most recently falling to the $80,000 level last week due to massive liquidations and selling pressure.
However, with the expectation of a FED interest rate cut increasing again, Bitcoin started the new week on the rise.
Bitcoin, which reached as high as $88,000 in the last 24 hours, has retreated to just below $87,000. It had fallen to around $81,000 on Friday.
The Factors That Made Bitcoin Rise Are Now Falling!
While the FED’s decreasing interest rate expectations, macroeconomic uncertainty, decreasing liquidity and increasing selling pressure were cited as the reasons for the decline, NYDIG research head Greg Cipolaro listed the main factors that caused the decline.
At this point, NYDIG’s Greg Cipolaro said that the primary factors that triggered Bitcoin’s rise are now triggering the price drop.
According to Greg Cipolaro, Bitcoin’s recent drop to $81,000 is due to market dynamics rather than investor confidence.
The analyst explained that the fundamental drivers behind the 2024-2025 Bitcoin rally are now contributing to the price drop.
At this point, Cipolaro stated that spot Bitcoin ETF inflows and Institutional Digital Asset Treasury (DAT) demand had pushed Bitcoin to record levels, but now they have led to a decline in price.
He noted that liquidations in early October caused a reversal in ETF inflows, a sharp decline in the DAT (DAT) premium, and a decrease in stablecoin supply, indicating that funds were leaving the system.
According to the analyst, spot Bitcoin ETFs, once a key success factor this cycle, have now become a factor hindering Bitcoin’s growth. Furthermore, declining global liquidity and macroeconomic news continue to impact Bitcoin.
NYDIG noted that spot BTC ETFs recorded net outflows for six consecutive trading days, a sharp contrast to the large inflows seen in the first half of the year.
Finally, Cipolaro added that DAT strategies have also been losing momentum recently. DAT and stablecoins were once significant sources of demand for Bitcoin, but now, with DAT premiums falling and stablecoin supply dwindling, investors appear to be withdrawing liquidity.
*This is not investment advice.
Source: https://en.bitcoinsistemi.com/nydig-reveals-the-real-reason-behind-bitcoins-sharp-drop-the-reasons-that-brought-bitcoin-to-its-ath-are-now-dropping-it/
