The $61k mark didn't hold as most of us expected it would hold. There was a dump on a Tuesday morning when bitcoin pumped and then dumped to $58k. This dumped continued consistently, suspending on the $59k for a full day until what happened today. But we won't be talking about what happened today.
** Let's focus on the major reason why bitcoin dumped despite the fact that there was limited negative news in the market** and that the US inflation actually cool to 2.9% which was a major problem affecting the crypto ecosystem negatively. These are some reasons why such happened. Let's talk about the dump before going straight to technical reasons.
**The price of bitcoin fell 4% at the time the market opened**. I think this was the highest drop this month when the price of bitcoin fell to $55k on August 14th. I don't know why this day is a memorable day but there was a transfer out that also contributed to the decline in price of bitcoin badly.
This transfer was made earlier in the morning of August 14th and the dump came in the evening, liquidating those who placed long trades with the optimism that the market would breakout and accept the price at $61k, leading to long green candlesticks. **As of when the market opened that August 14th, the US stock futures were flat and mixed for Nasdaq** as investors weren't anticipating such fluctuations.
** The crypto traders were bullish ahead of the US** Consumer Price Index due to their expectations that Fed would cut the interest rates in September which we are approaching. **Many were still bearish as they had high hopes that the Fed would crash the market**. Their expectations were invalid as the market did otherwise. Fed did crash the market but not that much.
The US CPI inflation fell to 2.9% from 3% in June according to statistics. **Irrespective of this, the US core CPI inflation came in at 3.2% from 3.3% marking a sharp decline.** Despite these reductions, the market still dumped as market Investors have placed their focus on the September 18th meeting where a rate cut is expected for the first time since 2020 in the Federal Open Market Committee.
** The price of bitcoin rose after the inflation data and was seen at 5% since August 14th.** The positive US Consumer Price Index inflation data led to the slow recovery of the crypto market.
Earlier this week, there have been speculations in the market and serious concerns raised as to whether US government will offload the **10k BTC they transferred which caused a dump in the market or whether they plan to sell it off**. Some analysts strongly believe that the US is planning to sell these bitcoins.
It is quite unpredictable to know whether this is a strategy move for the trading of bitcoin or just a measure to be taken into consideration. **If such amount of btc is sold, it will lead to a major dump in the market** which will affect the market as a whole. Just imagine that just transferring it made bitcoin drop from $61k to $55k.
**How much more selling it?** It's also interesting to know that a large influx of bitcoin can create panic in the market and crash its price potentially. The last time this happened, bitcoin dropped from $64k to $52k in no time. This has made some crypto analyst concerned that if such large volume is influxed into the market, it could crash bitcoin and create dips.
Now let's take a brief look at this chart pattern. bitcoin price is struggling on the **$61k with a bearish candle. If it breakouts here, we would see longs of $62k-$65k** but If rejected after the 50-day EMA has been analysed, we would see dumps to $58k or even more. Now, most of already saw the pump that happened this morning.
**What led to this pump?** Does the reduction or cutting of US inflation interest rate contributes or it's just market dynamics and speculations? This would be discussed in my next post. The fear and greed index has increased to 39, indicating less panic. Let's be optimistic and play well as traders.
To those who trade, I'll suggest you do your analysis on this coin - Reef as it may do wonders anytime soon. Just a financial suggestion. My source of information on the information given on this post is the news in the crypto space via binance.
**_Sreenshots are from my bybit app._**
> Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have
