New Delhi, June 6 (IANS). The world’s largest cryptocurrency Bitcoin fell below the $60,000 level for the first time since October 2024. With this, the ongoing decline in Bitcoin has further intensified. It has lost more than half of its value since reaching its peak of more than $1.26 lakh in October.
On Saturday morning, Bitcoin fell by about 7 percent and its price reached $ 59,101. Later it was seen trading around $59,743.21.
According to market experts, a major reason for the pressure on Bitcoin is the change in liquidity, especially the reduced investment by institutional investors.
Also, investors’ capital is now moving towards sectors like Artificial Intelligence (AI), defence, energy and infrastructure, due to which capital is flowing out of the cryptocurrency market.
Analysts say increasing interest in gold and shares of AI-related companies has also affected the demand for cryptocurrencies.
Apart from this, the changed outlook of investors regarding the possibility of interest rate cuts by the US Federal Reserve has also affected the crypto market.
Market experts believe that now investors will keep an eye on whether Bitcoin is able to maintain the important support level of $60,000 to $62,000 or not.
If this level continues then investor confidence in the market may return again.
According to experts, investment flows in exchange traded funds (ETFs), institutional participation, global economic developments and geopolitical conditions will be the key factors determining the direction of Bitcoin in the near future.
Some experts believe that the next growth phase of the cryptocurrency market will be fueled by clearer regulatory frameworks, innovation in stablecoins, and tokenization of real assets.
Experts have advised investors to focus more on their investment tenure, risk management and portfolio allocation rather than focusing on short-term price fluctuations.
The enthusiasm in the crypto market diminished further when US President Donald Trump announced Kevin Wersh as his choice for the post of new Chairman of the Federal Reserve.
Investors fear that under Warsh’s leadership the Federal Reserve could adopt a relatively tight monetary policy, which would shrink the central bank’s balance sheet and reduce liquidity available in the market.
Experts believe that this liquidity has so far been supporting risk assets, especially cryptocurrencies.
According to a recent report, crypto assets have been under pressure for a long time as institutional investors are continuously withdrawing money from the market.
More than $3 billion in withdrawals from US spot Bitcoin ETFs were recorded in January alone, the report said.
Market experts have warned that cash flow pressure on crypto mining companies could increase if Bitcoin prices continue to fall.
In such a situation, many miners may be forced to sell their holdings, which may create further pressure in the market.
After US President Donald Trump won the re-election, Bitcoin became the first choice of investors and its price reached record levels.
However, this leading cryptocurrency is now under constant pressure due to global economic uncertainties, lack of institutional investment and changing investment preferences.
–IANS
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