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Bitcoin (BTC) is experiencing significant price fluctuations, recently dropping to an intra-day low of $66,569. This decline comes amidst several key factors influencing the market, including a strengthening U.S. dollar, political uncertainties surrounding the upcoming U.S. presidential election, and increased selling pressure from recent futures market liquidations. As Bitcoin struggles to maintain momentum above $68,000, these elements are contributing to its current volatility.
Current Situation:
- Price Movement: Bitcoin (BTC) has recently dropped to an intra-day low of $66,569, down from a high of $68,000. The price is currently around $66,863.
- Recent Events: The drop occurred less than a day before the launch of spot Ethereum ETFs in the U.S.
Key Factors Affecting Bitcoin’s Price:
1. Strengthening U.S. Dollar:
- The U.S. Dollar Index (DXY) has risen to 103.85, up from a low of 103.18 on July 17. The PCE Index report, due July 26, may further impact the dollar’s strength, affecting Bitcoin and other cryptocurrencies.
2. Political Uncertainty:
- Biden’s Withdrawal: President Joe Biden’s withdrawal from the presidential race and endorsement of Vice President Kamala Harris has added volatility to the market. Harris's stance on cryptocurrencies is unclear compared to the pro-Bitcoin position of Republican candidate Donald Trump.
- Market Reaction: Historical patterns show that significant political news can cause short-term volatility in crypto prices.
3. Technical Resistance and Profit-Taking:
- Bitcoin faces resistance around the 2021 all-time high of $69,000. Some traders are booking profits ahead of upcoming events, like Trump’s speech at the Bitcoin Conference on July 27.
4. Futures Market Impact:
- Long Liquidations: Over the last 12 hours, more than $7.16 million in BTC long positions have been liquidated, contributing to the price drop. This reflects increased selling pressure as traders face losses.
5. Increased Exchange Inflows:
- The amount of Bitcoin transferred to exchanges has spiked, indicating that investors may be selling off their holdings, adding to the market volatility.
In summary, Bitcoin's price is currently under pressure from a strengthening U.S. dollar, political uncertainty, and increased selling pressure from long liquidations and exchange inflows. The market remains volatile, influenced by these multifaceted factors.
