Bitcoin and Crypto Market Update: Decline Amid Economic Data

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Current Prices

• CoinDesk 20 Index: 1,888 −3.6%
• Bitcoin (BTC): $58,764 −3.8%
• Ethereum (ETH): $2,639 −3.7%
• S&P 500: 5,455.21 +0.4%
• Gold: $2,496 +2.3%
• Nikkei 225: 36,726.64 +0.78%

Key Highlights

Bitcoin has experienced a significant decline, dropping over 4.5% to fall below the $58,500 mark within the past 24 hours. The cryptocurrency hit a low of $57,750 during this period. This downturn in Bitcoin’s value has triggered a ripple effect, causing declines across major altcoins, with Ethereum (ETH) also down by more than 4.5% and Solana (SOL) decreasing just under 4%. The overall CoinDesk 20 index, which tracks the performance of the largest cryptocurrencies by market capitalization, has seen a loss of 3.5%.

The primary catalyst for this sell-off appears to be the release of the U.S. July consumer price index (CPI) figures late Wednesday. The CPI rose by 2.9% year-on-year, aligning with expectations and marking the first increase of less than 3% since 2021.

Looking ahead, some traders are predicting that Bitcoin could plunge as low as $55,000 in the near term, which may lead to further declines across other major cryptocurrencies. According to K33 Research, crypto prices have shown a heightened sensitivity to U.S. economic data lately, as investors are increasingly favoring stability over riskier assets. Alex Kuptsikevich, a senior market analyst at FxPro, noted in a Thursday report, “A new sell-off momentum remains the prevailing trend, with a potential pullback to $55K. However, data suggesting the Federal Reserve’s forthcoming easing of monetary policy could empower bulls to break through the short-term downtrend, potentially paving the way for a rise to $66K.”

In addition, U.S.-listed spot Bitcoin ETFs recorded $81 million in net outflows on Wednesday, ending a brief two-day streak of positive inflows. Grayscale’s GBTC led the outflows with $56 million, while Fidelity’s FBTC saw $18 million exit. Other funds such as Ark Invest’s ARKB and Bitwise’s BITB also experienced losses of $6.7 million and $5.7 million, respectively. Conversely, Franklin Templeton’s EZBC and BlackRock’s IBIT were among the few products that managed to attract net inflows, collectively adding $6 million.

On a more positive note, Ether ETFs had a better performance, with $10 million in net inflows, extending their streak to three consecutive days. BlackRock’s ETHA recorded an impressive $16 million in inflows, while Grayscale’s ETHE faced a $16 million outflow. Additionally, Grayscale’s mini Ether trust ETH, along with Fidelity’s FETH and Bitwise’s ETHW, saw a cumulative $11 million in inflows.