btc

Why the decline in the cryptocurrency market is due to multiple resonating factors

1. Geopolitical and oil price shocks
Escalation of Middle East conflicts: Trump's hardline stance intensifies market panic, Iranian currency drops 2.79% in 24 hours, funds flow towards safe-haven assets like gold, and Bitcoin as a risk asset is sold off.

Transmission of oil price fluctuations: The situation in the Middle East raises energy costs, with domestic oil prices expected to increase by 580 yuan/ton, putting pressure on consumer purchasing power and indirectly suppressing cryptocurrency liquidity.

2. Macro sentiment and market cycle shift
Digesting Federal Reserve policy: The unchanged interest rate decision in June was absorbed by the market, but a hawkish stance on inflation has raised concerns about liquidity tightening.

Sentiment shifts from greed to neutral: The “extreme greed” sentiment in May cooled down, with Bitcoin falling below the key support of $104,000, triggering technical sell-offs. Long-term holders on-chain are accumulating, but short-term funds are withdrawing.

3. Liquidity-driven short-term volatility
Characteristics of messages during the consolidation period: Bitcoin has lacked a trend in the past month, with prices driven by news (such as Trump's tariff threats and Musk controversies), making it easy to gravitate towards “liquidity magnets.”

Altcoins weaken in coordination: ETH/BTC ratio weakens, Bitcoin's dominance rises to 48%, and altcoins fail to break through the $1.24 trillion resistance level, with funds flowing back to mainstream coins.

4. Technical breakdown and capital flow
Key support lost: Bitcoin falls below the monthly opening price of $104,600. If the daily closing price remains below $104,000, it may test the $102,000 - $100,000 range.

On-chain selling pressure emerges: Exchange outflows increase by 23% month-on-month, perpetual contract long positions decrease, and bearish sentiment in the market rises.

Short-term outlook
Geopolitical conflicts, Federal Reserve policies, and the contest for the $104,000 support level are core variables. If Bitcoin recovers this level, it may ease the downward trend.