Bitcoin Plunges Over 10% After Reaching $70,000 High
Bitcoin experienced a significant drop of over 10% after reaching a more than four-month high of $70,000 just three days ago, resulting in over $300 million in liquidations in less than 24 hours.
The price of Bitcoin has dropped below $63,000 following this correction. Currently, BTC is down 4% over the past 24 hours. Other major cryptocurrencies like ETH and SOL have also recorded notable declines, respectively down 5% and 10%.
Influences of Economic Factors
The markets reacted to mixed economic news. The FED kept its benchmark interest rates unchanged as expected, and its chairman, Jerome Powell, stated that if economic data continues to show a slowdown in growth and inflation, a cut in interest rates in September is possible.
The US ISM Manufacturing PMI for July dropped more than expected, leading to a decrease in interest rates to the lowest levels in several months. Moreover, initial jobless claims reached a one-year high, reinforcing expectations of a monetary easing cycle by the Federal Reserve, which is generally favorable for risk assets like Bitcoin.
Reactions of Central Banks in the Rest of the World
Meanwhile, the Bank of England has joined the monetary easing movement initiated earlier in 2024 by the Bank of Canada and the European Central Bank. It is the first time in four years that the Bank of England has reduced its benchmark rate, a decision made to stimulate a slowing economy.
Evolution of Political Perspectives
The surge of Bitcoin to $70,000 last Monday was fueled by the excitement generated by the Bitcoin 2024 conference in Nashville. Republican candidate Donald Trump pledged his support for Bitcoin at the conference and even considered holding it as a strategic asset for the government.
However, Bitcoin investors now need to take into account the declining chances of Trump’s victory. According to Polymarket, the chances of Kamala Harris, the new Democratic candidate, winning the election have risen to 44%, while Trump’s chances have dropped to 55%.
