Why is the price of Bitcoin (BTC) currently declining?
Here is one of the main reasons for the recent decline:
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1. Profit-taking after recording historic peaks
After the price of Bitcoin approached the $112,000 barrier in mid-May, investors began taking profits, leading to a slight correction (-1.6% in the last 24 hours, down from $110,332 to around $107,736).
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2. Volatile macroeconomic environment
Recent economic data like inflation rates and employment sparked expectations of interest rate hikes by the Federal Reserve, pushing investors towards safe assets like the dollar and bonds, which pressured risk assets including cryptocurrencies.
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3. Strength of the US dollar
The rise of the US dollar in recent weeks reduces the attractiveness of dollar-denominated investments like BTC, as traders become cautious awaiting further economic data.
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4. Trade and geopolitical tensions
Reports linked the decline of cryptocurrencies to tariffs imposed by the US, which negatively affected technology stocks and high-risk funds, reflecting back on the digital market.
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5. Negative flows from ETFs
Despite the large capital inflow to recent index funds, the past days have seen massive outflows totaling hundreds of millions of dollars from funds like Fidelity and Grayscale, adding pressure to the price.
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6. Margin positions liquidations
High liquidity and leveraged strategies traded on rising prices, but the current correction pushed margin positions to the side, often leading to additional price declines when positions are freed up.
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✅ Overall assessment
Factor Its impact on BTC
Profit-taking after the peak Downward pressure since January
Inflation and dollar strength Decreased demand for risk assets
Trade tensions Heightened broad market fears
Withdrawals from ETF Decrease in price liquidity
Margin liquidation Rapid declines due to volatility
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🌍 Will the price reverse the trend?
The market has become more mature: less volatility than before but more correlated with traditional financial markets.
The upcoming may be affected by inflation reports, jobs data, and the US Federal Reserve's stance.
If we are surprised by a rate cut or economic stability, we may witness strong rebounds.
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🔍 Monitoring tips
Monitor the federal dollar price and its bonds, and daily job reports/non-farm payrolls.
Follow Bitcoin ETF fund flows (especially Grayscale/Fidelity).
Watch key support levels at ~100,000–105,000 dollars.
