A photo illustration depicting the cryptocurrency bitcoin.
Jakub Porzycki | NurPhoto via Getty Images
Bitcoin continued its descent on Monday, sliding below $60,000 for the first time since May 3.
The price of the flagship cryptocurrency was last down 7% at $59,562.54, according to Coin Metrics. Earlier, it fell as low as $59,021.42, about 19% from its March record. In the past week, it’s fallen nearly 11%.
Crypto investment products notched a second consecutive week of outflows, according to crypto-focused asset manager CoinShares. Last week, they saw their lowest trading volumes globally since the U.S. bitcoin ETFs launched in January.
“We have now seen $1.2 billion of outflows from crypto ETFs over the last two weeks which all began after the FOMC meeting. Our belief is that continued pessimism over the number of rate cuts is weighing on sentiment for crypto,” James Butterfill, head of research at CoinShares, told CNBC.
“The Fed have indicated they need to see further evidence of inflation falling before they become more dovish, so any macro say that highlights inflation continues to fall will likely support prices, and conversely, an inflationary date will weigh on prices,” he added.
Eleanor Gaywood, head of strategy at Coincover, said there are often market jitters ahead of the personal consumption expenditure index, the Fed’s preferred inflation gauge, which is due this Friday. She said signs of a rate cut in September could ease investor nerves and steady bitcoin’s price.
Bitcoin has been steadily descending since the beginning of June
Additionally, bitcoin saw a jump in long liquidations, forcing traders to sell their assets at market price to settle their debts. In the past 24 hours, $152.66 million in long bitcoin liquidations have occurred across centralized exchanges, according to CoinGlass.
Cryptocurrencies broadly tumbled with bitcoin. Ether lost 4%, while the token tied to smart contracts platform Solana fell 2%, along with payments token XRP. The meme token dogecoin dropped almost 6%.
In equities, Coinbase and MicroStrategy declined 6% and 7%, respectively. Nearly all miners were in the red.
Last week, CryptoQuant suggested bitcoin could slide back to $60,000, after breaking below the key support of $65,800, due to a lack of bullish momentum. The company’s on-chain data shows traders have been reducing their holdings since bitcoin touched $70,000 in late May and have yet to start buying again.
For the month, bitcoin is down nearly 10%. At the start of June, it briefly touched the $71,000 level but has been on a steady decline since. It has been largely stuck in a narrow range between $60,000 and $70,000 since the middle of March when it reached its all-time high of $73,797.68.
Investors and analysts are confident the cryptocurrency will rebound and notch another record this year. Ryan Rasmussen, an analyst at Bitwise Asset Management, called the price action “bullishly choppy.”
“There’s a market-changing tailwind behind crypto that isn’t reflected in the choppy price action on a week-to-week basis,” he said, pointing out bitcoin’s more than 40% year-to-date gain, progress on ether ETFs and crypto’s political tides shifting in its favor.
“From a long-term investment thesis, bitcoin has rarely been more attractive than it is right now.”