Bitcoin price dropped 10% over the past 10 days, attracting the attention of investors and analysts. This decline is largely attributed to the overall macroeconomic situation, but there are other reasons affecting the cryptocurrency's price as well.
Impact of Macroeconomic Factors
Trader DamiDefi explains that the state of the U.S. economy impacts Bitcoin. Centralized economic measures such as Federal Reserve policy and the performance of the U.S. dollar play a significant role in forming a 'bullish' narrative for Bitcoin. Traders expect that a looser Federal Reserve policy, including lowering interest rates, could positively affect the cryptocurrency's price. Additionally, investors are turning to safer assets like U.S. government debt.
Impact of ETFs on Bitcoin
One factor contributing to negative investor sentiment is the persistent outflows from spot Bitcoin ETFs. Between August 27 and August 30, spot Bitcoin ETFs recorded a net outflow of $480 million, erasing the $455 million inflow registered two days earlier. This has led traders to question whether smart money anticipates further BTC price declines.
Miner Profitability and Its Importance
Bitcoin investors are also concerned about declining miner profitability. Now nearing all-time lows, this could force miners to sell some of their assets. According to Hashrateindex.com, the miner profitability index dropped to $42 per PH per day from $48 per PH per day two months ago. This change is driven by factors like network difficulty, Bitcoin's price, and transaction fees.
The decline in Bitcoin's price is attributed to a combination of macroeconomic factors, ETF outflows, and declining miner profitability. These elements create an unfavorable environment for the cryptocurrency, although some traders still expect the situation to improve on the back of potential Federal Reserve policy easing.
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