Bitcoin has seen a noticeable decline recently, with its price dropping to around $106,617, after having surpassed $111,000 earlier this month. This decline is attributed to a combination of interrelated factors affecting the market.
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📉 The main reasons for the drop in Bitcoin
1. Profit taking by investors
Following recent highs, many investors took profits, leading to increased selling pressure and a decline in prices.
2. Global economic pressures
The announcement by U.S. President Donald Trump of a 25% tariff on imports from Canada and Mexico, along with threats of tariffs on the European Union, raised concerns about escalating trade tensions, prompting investors to shy away from high-risk assets like Bitcoin.
3. Security breaches on trading platforms
The Bybit platform suffered a major security breach that resulted in a loss of approximately $1.5 billion, increasing investor concerns about the security of digital assets and prompting them to withdraw their funds.
4. Decline in institutional flows
Bitcoin exchange-traded funds (ETFs) experienced significant outflows, with more than $2 billion withdrawn in a single week, indicating a decline in interest from institutional investors.
5. Regulatory uncertainty
Despite some supportive initiatives for digital currencies, the lack of clarity in regulatory policies in the United States and other countries raises concerns among investors and negatively impacts the market.
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🔮 Future outlook
While some analysts expect the downturn to continue in the short term, others indicate that these corrections may pave the way for future increases, especially with the rise in institutional adoption and improvement in the regulatory environment.
