A woman holds a smartphone displaying a bearish trend concept for Bitcoin in the background. The price of Bitcoin experienced a 4% decline on June 10, dropping to around $66,000 before recovering slightly. This drop was attributed to trader anxiety surrounding the upcoming release of US inflation data and the Federal Reserve’s monetary policy decision.
The decrease in Bitcoin’s price has excited short contract traders, who are anticipating a potential uptrend that could trigger a short squeeze. Investors are closely monitoring economic data that could impact Bitcoin, particularly the consumer price index (CPI) data set to be released on June 12. Higher inflation rates could lead the Federal Reserve to consider raising interest rates, which may lessen the appeal of riskier assets like Bitcoin.
The recent US employment report, which showed strong job growth in May, along with higher-than-expected wage increases, indicates a robust economy. This has raised concerns among investors about sustained higher interest rates negatively affecting Bitcoin. The struggle to surpass the $72,000 resistance level and rising bond yields have further dampened confidence in Bitcoin’s price action.
On-chain metrics from Glassnode reveal a bearish sentiment towards Bitcoin prices. A decline in the number of addresses holding significant amounts of Bitcoin, particularly those with 10,000 BTC, suggests that large holders are either selling off their assets or reallocating them. This lack of confidence in Bitcoin’s short-term prospects is reflected in the reduction of large holder addresses with 1,000 BTC tokens as well.
Address metrics for holders with at least 100 BTC show significant volatility, indicating uncertainty among relatively minor large holders reacting to market fluctuations. This instability can lead to increased selling pressure, exacerbating price declines. The reduction in large Bitcoin holders is a bearish signal as their influence on market sentiment diminishes, potentially leading to increased market volatility and struggles to maintain key support levels.
As major holders sell off their assets, downward pressure could breach support levels, resulting in further price drops for Bitcoin.
