What’s Behind Bitcoin’s Fall Below $66,000

Bitcoin has lost 5.7% over the past 12 hours or so, falling $4,000 on a $70,000-$66,000 drop during early Asian trading on Tuesday, where it found support.

However, it remains within a five-month range channel that formed at the end of February.

Analysts have been looking for clues to explain the sudden drop in market sentiment after a seven-week high for the asset.

Political polls or US government moves?

On July 30, economist and crypto trader Alex Krüger noted that prices and euphoria were building on Monday after Trump’s speech, with BTC hitting $70,000, “and then -5% online straight”.

He said it may have something to do with how well Democratic presidential candidate Kamala Harris is doing in the polls.

“If I tried to rationalize the move, I’d say it was a partial reflection of Kamala doing very well in the polls (polls, not betting markets). Trump’s trade is long Bitcoin and long small caps. Kamala’s trade is the opposite”.

According to The Hill, Trump’s lead in the polls had narrowed to just 1.5 percent as of July 30 at 47.6 percent to rival Harris’ 46.1 percent.

Crypto trading can be brutal. Prices and euphoria were rising at the open for US stocks today, after Trump’s speech, $BTC marked 70K, then wham -5% in a straight line.

If I tried to rationalize the move, I’d say it was a partial reflection of Kamala doing… pic.twitter.com/GLalHo8jo0

— Alex Krüger (@krugermacro) July 29, 2024

Another factor for the drop was that the US government moved around 29,800 BTC worth approximately $2 billion on July 29. This comes just days after Donald Trump said he would not sell any of the government’s Bitcoin reserves if elected.

The US government now holds 183,438 BTC worth about $12.5 billion, according to Arkham Intelligence.

Trump: We won’t sell any in isolation $BTC and allocate it to a strategic reserve.

Biden Administrator: pic.twitter.com/rqXePgKWtA

— Hsaka (@HsakaTrades) July 29, 2024

In a post on X on July 30, crypto analyst “Immortal” opined that the download was not necessarily a bad thing.

“However, the best thing that could happen to us is more consolidation. The greater the consolidation, the greater the expansion.”

Elsewhere on Crypto Markets

Total market capitalization has declined about 4.4% in a decline to $2.48 trillion at the time of writing. However, it has also been largely on the sidelines for the past five months.

Ethereum fell from nearly $3,400 to around $3,260 before rallying to regain $3,300 during early trading in Asia on Tuesday.

Other altcoins were hit harder as usual, with bigger losses for Solana (SOL), Cardano (ADA), Avalanche (AVAX), and Near Protocol (NEAR).

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