Bitcoin Crashes To $65,000, Expert Unpacks Drivers Of Crypto Market Bloodbath

The
cryptocurrency
market
has
been
experiencing
a
significant
downturn,
with
Bitcoin
leading
the
way
by
retracing
to
the
$65,000
mark
after
failing
to
retest
its

all-time
high

of
$73,700
reached
in
March.

Market
expert
Michael
van
de
Poppe
has
shed
light
on
the
reasons
behind
this
ongoing
bloodbath,
highlighting
several
key
factors
that
have
contributed
to
the
current
state
of
the
market.

Crypto
Market
Battles
Uncertainties

A
key
event

highlighted

by
van
de
Poppe
is
last
Wednesday’s
release
of
the
Consumer
Price
Index
(CPI)
data,
which
has
a
major
impact
on
the
Federal
Reserve’s
decision
on
interest
rates.

The
data,
which
came
in
lower
than
expected,
favored
risk
assets.
A
lower-than-expected
headline
CPI
of
3.3%
(vs.
3.4%
expected)
and
core
CPI
of
3.4%
(vs.
3.5%
expected)
pointed
to
potential

rate
cuts

or
a
positive
outlook
for
future
rate
cuts,
providing
favorable
market
conditions.

Related
Reading

Another
significant
event
was
the
release
of
the
Producer
Price
Index
(PPI)
data,
which
provides
inflation
data
from
the
producer’s
perspective.
The
data
revealed
a
lower-than-expected
regular
PPI
score
of
2.2%
(versus
an
expected
2.5%)
and
Core
PPI
Y/Y
score
of
2.3%
(versus
an
expected
2.4%).

Additionally,
the

monthly
data

showed
negative
figures,
further
favoring
risk-on
assets.
However,
van
de
Poppe
contends
that
despite
these
positive
indicators,
the
crypto
market
has
continued
its
downward
trend.

According
to
van
de
Poppe,
the
release
of
consumer
sentiment
data
on
Friday
also
impacted
the
market.
Consumer
sentiment
is
considered
a
market
leader
and
a
gauge
of
market
strength
or
weakness.
The
data
came
in
lower
than
expected,
with
a
score
of
65.6
(versus
an
expected
72.1).

This
data
signaled
a
lack
of
economic
strength,
potentially
fueling
bullish
sentiments
for
risk-on
assets
and
a
shift
toward
crypto-native
markets.

However,
Federal
Reserve
Chairman
Jerome
Powell
delivered
an
unexpectedly
hawkish
speech.
Despite
data
pointing
towards
the
need
for
rate
cuts
and

worsening
economic
conditions,
Powell
maintained
a
hawkish
tone
and
revised
the
potential
rate
cuts
in
2024.

According
to
Michael
van
de
Poppe,
this
outlook
did
not
bode
well
for
the
markets,
adding
to
existing
uncertainties
and
the
notorious
price
volatility
seen
in
recent
days.

Bitcoin
Price’s
Struggle
Continues
As
Bond
Yields
Drop

The
analyst
further
pointed
out
that
Market
indicators,
such
as
Treasury
Bond
Yields,
declined.
The
2-year

Treasury
Bond
Yield

dropped
to
the
lowest
point
in
two
months,
while
the
10-year
Yield
continued
its
fall
to
the
lowest
point
since
the
beginning
of
April.

These
indicators
typically
suggest
favorable
conditions
for
Bitcoin
and
risk-on
assets,
implying
a
higher
probability
of
a
potential
rate
cut.
However,
the
strength
of
the
US
Dollar
persisted
due
to
the
rate
cut
by
the
European
Central
Bank
(ECB).