Why Is Bitcoin Unable To Break Through The $60,000 Mark ?

Volatility is an integral part of the cryptocurrency market, but when Bitcoin wavers below the $60,000 mark, a burning question arises: are we witnessing a simple technical retreat or a worrying signal for the entire ecosystem? While traditional markets absorb the shocks of the global economy, Bitcoin, once seen as a digital safe haven, is also swept up by economic uncertainties and bond yield fluctuations. This new episode of decline, marked by massive liquidations and a concerning slowdown in capital flows, highlights unexpected fragility.

Bitcoin in the Face of Economic Pressures and Massive Liquidations

The recent plunge in the Bitcoin price below $60,000 is anything but a simple technical correction. Within two days, the leading crypto recorded a 9.9% drop, hitting a low of $57,918 on August 28 and triggering the forced liquidation of $143 million in long positions on the derivatives markets. This abrupt contraction has highlighted investor nervousness amid uncertain macroeconomic conditions. Among the explanations offered, the outflows from Bitcoin spot ETFs are particularly scrutinized. Although these outflows are often a delayed reaction to events, they reveal a persistent loss of confidence in the market. The situation worsened with the increase in yields on 2-year US Treasury bonds, a strong signal that investors are abandoning risk assets in response to uncertainties weighing on the earnings of major tech companies and fears of the Federal Reserve maintaining high rates.

Indeed, the increasingly marked correlation between Bitcoin and traditional markets, such as the S&P 500 index, highlights crypto’s sensitivity to broader economic turbulence. The release of Nvidia’s results, although better than expected, reinforced a sense of caution in the markets and exacerbated Bitcoin’s volatility. Furthermore, expectations of a possible delay in Fed rate cuts have intensified selling pressure, pushing Bitcoin further away from its recent highs.

A Market on Hold: Slowing Inflows

Beyond cyclical factors, a concerning element is emerging: the slowdown in net capital inflows into the Bitcoin market, indicating marked investor hesitation. Recent data from Glassnode shows that inflows are currently at historically low levels, a situation rarely seen outside of deep bearish corrections. This phenomenon suggests a waning appetite for risk, as the market oscillates between profit-taking and waiting for more favorable conditions. The Realized Cap, which measures Bitcoin’s valuation based on net capital inflows, nevertheless remains at a historical high of $619 billion, supported by massive infusions since the lows of 2022. This fragile balance suggests that the market might be in a latency phase before a potential resurgence in volatility.

Despite this gloomy context, some indicators suggest potential for recovery. Bitcoin is currently oscillating around critical technical levels, notably testing the resistance of the 200-period exponential moving average on intraday charts, a barrier that, if breached, could pave the way for a significant upward move. However, the inability of Bitcoin to overcome this resistance would heighten the risks of further correction, with support levels around $56,138. This technical zone will be crucial in the coming days as investors assess the possibility of a trend reversal or a continuation of the corrective phase.