Bitcoin Drops Ahead of Data Releases

CoinDesk 20 Index: 1,925 −2.1% Bitcoin (BTC): $59,616 −1.9% Ether (ETH): $2,675 +0.5% S&P 500: 5,344.16 +0.5% Gold: $2,481 +2.0% Nikkei 225: 35,025 +0.56%

Bitcoin’s (BTC) decline comes as traders record broad sell-offs ahead of a crucial week of position-taking. BTC is down 4.8% in the past 24 hours and is currently trading just above $58,500. Ether (ETH) is down 3.5%. Solana’s SOL token and toncoin (TON) led the majors with losses, down 7%. BNB Chain’s BNB is down 3%, dogecoin (DOGE) is down 6%, while Cardano’s ADA and XRP are down 5%.

Some market watchers have warned that BTC will fall further in the coming weeks, citing technical weakness, but pointed to upcoming traditional market releases that could provide upward pressure. Both the UK and the US are due to release their July Consumer Price Index (CPI) readings on Wednesday. Australia’s consumer confidence, which reports on sentiment around family finances, and Japan’s Producer Price Index (PPI), a measure of price developments for goods traded in the corporate sector, are also due on Tuesday. Retail giants Alibaba Group and Walmart are set to report earnings on Thursday, while Hong Kong and Taiwan are due to report their latest gross domestic product (GDP) reports on Friday.

A former Bank of Japan official said the central bank would delay further rate hikes until next year. “Whether they will make a change by next March is a matter of debate,” Makoto Sakurai said on Friday, according to Bloomberg. The BOJ raised its key interest rate to around 0.25% from a range around zero on July 31, the first increase in more than a decade. The move away from the zero-interest rate policy has sent the yen higher and triggered the unwinding of “risky” yen carries. The resulting decline in traditional risk assets has weighed on BTC, sending the cryptocurrency from around $65,000 to $50,000 in less than seven days.

The chart shows the percentage decline in bitcoin’s price since late 2022. The decline from $70,000 to $50,000 was the biggest in recent times. According to Blockware, “This is typical of declines: Those who hold their portfolio thinly took huge losses, while experienced traders bought low.” Source: Blockware, Glassnode