Bitcoin (BTC) experienced a significant gain of over 6% from August 12 to 13, but failed to sustain its position above $60,000, subsequently dropping to a low of $56,000. As of now, Bitcoin is trading at $60,390, reflecting a 3% increase in the past 24 hours. This recent volatility contrasts sharply with the S&P 500 index futures, which are approaching record highs as of August 19, and Gold, which reached a new all-time high on August 16.
Several factors are contributing to Bitcoin’s recent downturn. The prospect of a potential recession has led traders to reduce their cryptocurrency holdings, while economic resilience has supported stock market gains. However, Goldman Sachs has lowered its US recession probability from 25% to 20%, following stronger-than-expected jobless claims and retail sales data. Jan Hatzius, the bank’s chief US economist, has suggested that the Federal Reserve might consider a rate cut in September.
Market confidence was further bolstered by a financial stability agreement between the US Treasury Department and China’s central bank. This collaboration, which addresses capital markets and monetary policies, has alleviated fears of a potential stock market collapse.
Additionally, Bitcoin’s decline below $63,000 can be attributed to recent ETF outflows. Spot exchange-traded funds have seen $372 million in outflows over the two weeks ending August 16, indicating a decline in institutional interest. Historically, inflows into these ETFs have been a positive indicator for Bitcoin prices, as they reflect significant investments from traditional financial managers.
Miners’ profitability is also under scrutiny. With substantial Bitcoin reserves, miners may be compelled to sell their holdings to manage high energy costs. According to Glassnode, miners’ balances remain steady at 1.80 million BTC, unchanged from the previous month.
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