The deteriorating macroeconomic environment and the collapse of industry giants such as FTX and Terra have put pressure on the price of Bitcoin this year.
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Bitcoin’s Prices fell to around $57,000 a share on Thursday, hitting a two-month low after minutes from the Federal Reserve’s June meeting showed the central bank was not ready to cut interest rates.
The digital currency fell about 5% in 24 hours to $56,837 at around 2:30 pm London time, falling below the $57,000 mark for the first time since May 1, according to data from crypto ranking website CoinGecko. Bitcoin has since regained some ground, trading at $57,932.57, down 3.4%, as of 5:05 p.m. London time.
Rival Ethereum, the world’s second-largest cryptocurrency, fell 5% to $3,120.
Previously, the Federal Reserve released the minutes of its June meeting on Wednesday, which showed that officials were unwilling to lower interest rates unless more data showed that inflation continued to move towards the central bank’s 2% target.
Higher interest rates are generally bad for Bitcoin and other cryptocurrencies because it dampens investors’ risk appetite.
In March, Bitcoin soared to a record high above $73,700 after the SEC approved the first U.S. spot Bitcoin exchange-traded fund (ETF).
ETFs allow investors to buy products that track the price of Bitcoin without owning the underlying cryptocurrency. Cryptocurrency proponents say this would help legitimize the asset class and make it easier for large institutional investors to participate.
However, since then, Bitcoin has been trading between approximately $59,000 and $72,000.
The world’s largest cryptocurrency has been under pressure recently with news of the collapse of Bitcoin exchange Mt. Gox, which was preparing to distribute approximately $9 billion worth of Bitcoin to users, which is expected to lead to some major selling action.
However, analysts at crypto data and research firm CCData said in a research note on Tuesday that Bitcoin has not yet reached the top of its current appreciation cycle and could hit new all-time highs.
According to the report, historical market “cycles” show that Bitcoin’s so-called “halving” event, which reduces the supply of new Bitcoins on the market, is always preceded by a period of price expansion that can last 12 to 18 months. Bike tops before.
The last Bitcoin halving occurred on April 19 of this year, so these historical time frames have not yet passed.
“Additionally, we have observed that trading activity on centralized exchanges has been declining for nearly two months after the halving events of previous cycles, which appears to be reflective of this cycle as well. This suggests that the current cycle may be Further expansion to 2025.
Meanwhile, Bitcoin bull Tom Lee told CNBC’s “Squawk Box” on Monday that he still believes Bitcoin will reach $150,000 despite Mt. Gox’s imminent payment of tokens to creditors.
“If I was invested in cryptocurrencies and I knew that one of the biggest unanswered questions was going to be gone in July, I would think that would be a reason to expect a big rebound in the second half of the year,” said Lee, co-founder of Fundstrat Global Advisors. said in a television interview.
