The recent 10% drop in Bitcoin's price is attributed to several factors, including unfavorable economic data and high market speculation.
Unfavorable Economic Data
The economic landscape worsened with reports of a growing unemployment rate, reaching 4.7% — the highest in four years. Uncertainty regarding economic data has put pressure on the likelihood of a rate cut, affecting investor sentiment.
Speculative Conditions and High Leverage
An increase in open interest and a high degree of speculation led to Bitcoin's volatility. In the last two weeks, liquidation levels rose, including over $228 million in a single day, contributing to price drops.
Bitcoin ETF Outflows and Institutional Selling Pressure
Bitcoin ETFs, which had previously supported bullish sentiment, recorded outflows of $523.3 million this week. This may have further deteriorated market sentiment as institutional selling pressure increased.
Bitcoin's price decline can be linked to unfavorable economic indicators, high speculation, and shifts in institutional investor behavior. These factors pose risks of further price drops.
