Fun

3 reasons why Bitcoin (BTC) price is down today

News Feed - 2024-07-26 04:07:50

Marcel Pechman4 hours ago3 reasons why Bitcoin (BTC) price is down todayStrong macroeconomic data, fear of an artificial intelligence bubble and an ongoing court case could be factors in Bitcoin’s multiday correction.2749 Total views3 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksAfter flirting with the $68,000 level on July 22, Bitcoin (BTC) faced a 6% correction in three days, erasing the gains from the prior week. From a bullish perspective, there is a positive indication as the $64,000 support held firmly. 


Buyers stepped in to defend Bitcoin’s market capitalization at $1.25 trillion, slightly above the United Kingdom"s British pound, valued at $1.15 trillion. Still, Bitcoin bears have macroeconomic data on their side, at least in the short term.Bitcoin price drop coincides with the US stock market decline


Bitcoin’s price decline coincides with the Nasdaq index futures movement, which experienced a 4.9% correction between July 23 and July 24. Traders now question if the drivers behind the stock market decline, especially the tech names, justify the correlation with the cryptocurrency market. If investors’ concerns are mostly derived from economic recession fears, Bitcoin’s long-term appeal could present a buying opportunity.Bitcoin/USD (left) vs. Nasdaq futures (right). Source: TradingView


Semiconductor stocks and those related to artificial intelligence infrastructure (AI) led the move, with Crowdstrike (CRWD) down 25.5% in a week, followed by Super Micro Computer (SMCI) down 12.6%, GlobalFoundries (GFS) down 12.2%, NXP Semiconductors (NXPI) down 10.8%, and Intel Corp (INTC) down 10.5%. The market seems especially concerned with the perspective of AI demand, given how the investment in the sector has yet to result in profitability.


UBS Global Research’s Stephen Ju warned investors that the AI investment benefits in Google’s cloud platform are “difficult to discern” and should not be visible on the revenue line before mid-2025. In the second quarter, Google"s parent company reported spending $2.2 billion building AI models. Consequently, Ju questions if the investment returns will be compromised, as the company will require higher capital expenditure for another two years, as reported by Yahoo Finance.Strong macroeconomic data and a court case against Bitfinex


Recent macroeconomic data has also contributed to investors’ worsening sentiment. The United States economy grew at a 2.8% annualized rate in the second quarter, above the market consensus of 1.9%. Additionally, continuing jobless claims, which measure the number of people in the US receiving benefits after an initial week of aid, declined on a seasonally adjusted basis. This indicator typically serves as a proxy for hiring, a more forward-looking metric.


Recent economic indicators signal the success of the US Federal Reserve"s (Fed) strategy to curb inflation without causing a recession. The US central bank has kept its benchmark overnight interest rate in the current 5.25%-5.50% range since 2023, but analysts expect two to three cuts by the end of 2024.


This data is somewhat negative for Bitcoin, as part of its appeal is as a hedge against inflation, a lower value of the US dollar, and decreased investor confidence in US Treasury securities. In other words, a strong economy makes alternative assets less appealing, regardless of the stock market"s expectations for corporate earnings.


Related:Crypto has more potential than stocks, real estate — Kraken survey


Bitcoin investors are also concerned about the civil litigation case against the Bitfinex exchange and Tether company. The US District Court for the Southern District of New York allowed the class-action complaint to proceed to discovery on claims of a scheme to manipulate the market price for certain cryptocurrencies through the fraudulent issuance of unbacked Tether (USDT). The court released the redacted document with the latest updates on July 24.


It is worth noting that this is a civil case, and the claims presented have not yet been proven in court. Essentially, Bitfinex and Tether may ultimately have to pay a fine and adjust some of their procedures, but this process will likely take years to resolve fully. Therefore, even if the outcome is negative, there is nothing about this case that should cause imminent price pressure on Bitcoin.


Bitcoin’s recent underperformance can most likely be attributed to strong macroeconomic data and investors’ fears of a bubble caused by the artificial intelligence hype.


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Cryptocurrencies# Google# Federal Reserve# Nasdaq# Bitcoin Price# Technology# Economy# Markets# BTC Markets# Tether# Market AnalysisAdd reaction

News Feed

Brayden Lindrea8 hours agoDonald Trump’s Ethereum wallet holds $2.8M, new statement showsThe recent disclosure ups the figure disclosed in earlier records that said Trump held between $250,000 to $500,000 in an Ethereu
‘NFT’ Chosen as 2021’s Collins English Dictionary ‘Word of the Year’
"NFT" Chosen as 2021"s Collins English Dictionary "Word of the Year" As 2021 nears its end, the firm Harpercollins, the publisher behind the printed and online Collins English Dict
Square Enix to Deepen Its Blockchain Efforts in 2023
Square Enix to Deepen Its Blockchain Efforts in 2023 Square Enix, the Japanese gaming giant, is preparing to announce more blockchain-based titles in 2023. As part of a now traditi
Bitcoin traders say BTC’s trend change potential rests at $65K
Nancy Lubale5 hours agoBitcoin traders say BTC’s trend change potential rests at $65KBitcoin’s potential trend change awaits at $65,000, where short-term traders will break even and leveraged shorts risk a major wash
Biggest Movers: ATOM Approaches 1-Month High, While MATIC Hits 1-Week High
Biggest Movers: ATOM Approaches 1-Month High, While MATIC Hits 1-Week High ATOM was fast approaching a one-month high during Tuesday’s session, as bullish momentum continued
Blockchain Software Firm Consensys Acquires Mycrypto Ethereum Wallet
Blockchain Software Firm Consensys Acquires Mycrypto Ethereum Wallet On February 1, the blockchain infrastructure firm Consensys has revealed it has acquired the Ethereum-based wal
Hack VC raises $150M to back crypto and AI startups
Brayden Lindrea3 hours agoHack VC raises $150M to back crypto and AI startupsHack is looking to invest in the most “capital-efficient” DeFi projects and solutions that prevent smart contract and protocol hacks.775 To
Russia’s National Finance Association Calls for Legalization of Crypto Investments
Russia’s National Finance Association Calls for Legalization of Crypto Investments The main finance industry association of Russia has urged authorities to reconsider a position
PayPal opens PYUSD stablecoin to USD conversions for cross-border transfers
Zhiyuan Sun8 hours agoPayPal opens PYUSD stablecoin to USD conversions for cross-border transfersThe cross-border payments will be handled via PayPal’s Xoom subsidiary.1248 Total views4 Total sharesListen to article 0:
DOJ challenges motion to dismiss Tornado Cash co-founder’s charges
Amaka Nwaokocha1 hour agoDOJ challenges motion to dismiss Tornado Cash co-founder’s chargesAccording to the filing, the DOJ criticized Tornado Cash’s co-founders for inadequate changes to exclude sanctioned addresses
$7.5 Million NFT Collection Accused of Using Art Without Permission Threatened by Legal Action
$7.5 Million NFT Collection Accused of Using Art Without Permission Threatened by Legal Action While non-fungible token (NFT) assets have been extremely popular in 2021, there
Tom Blackstone6 hours agoTether attestation shows cash and cash equivalents of 86% as loans declineTether’s newest reserve attestation shows the highest-ever percentage of cash equivalents, with most reserves consistin