Why Is Bitcoin Down On Monday? Experts Monitor 4 Key Factors

Bitcoin‘s BTC/USD price experienced a volatile start to the new trading week, dropping below $56,000 during the Asian session and again in early U.S. hours.

What Happened: The overall cryptocurrency market also suffered, with its total valuation down to $2.1 trillion, according to DL News. An analyst at crypto trading firm Wintermute described the situation as “The streets are covered with haemoglobin.”

Experts are monitoring four key factors influencing Bitcoin’s price:

1. Industry analysts expect U.S. regulators to approve spot Ethereum ETH/USD exchange-traded funds (ETFs) soon. David Zimmerman from K33 Research told DL News that a positive ETF update could signal a market recovery, while other analysts believe their trading launch is around the corner.
   
2. Additionally, the long-awaited repayment to Mt. Gox creditors began on Friday, with $2.6 billion in Bitcoin being returned. Brian Rudick from GSR noted that this could impact the market as creditors might sell their holdings.
   
3. The German government moved over 10,000 Bitcoin to various wallets and exchanges since June 19, according to Arkham Intelligence, with traders fearing a potential sell-off.
   
4. Lastly, traders are closely watching the Federal Reserve’s stance on interest rates. A potential rate cut could lead to increased investment in riskier assets like cryptocurrencies. David Brickell from FRNT Financial suggested that rate cuts might begin in September.

Also Read: These Altcoins Show Bullish Signals While Bitcoin Faces Critical Juncture

Why It Matters: Bitcoin’s recent price drop comes after a CoinShares report from July 8 showed institutional inflows into digital asset investment products totaling $441 million last week, despite the price slump. This suggests that some investors view the recent declines, driven by Mt. Gox repayments and German government actions, as buying opportunities.

Still, Bitcoin critic Peter Schiff highlighted concerns over ETF investors being set up to bear losses. On July 7, Schiff noted that while the “smart money” is selling Bitcoin in the spot market, the “dumb money” is buying it through ETFs. Traders see $60,000 as a “line in the sand” for Bitcoin.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next:

• While Bitcoin, Ethereum, Shiba Inu Witness A Meltdown, This Solana-Based Memecoin Has Surged 147% In Last

Image: Shutterstock

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.