Why is Bitcoin price down today?

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On June 21, Bitcoin (BTC) experienced a 2.30% drop, reaching $63,500, its lowest level in over a month. This decline was linked to a series of outflows from Bitcoin’s spot exchange-traded funds (ETFs) and a noticeable decrease in BTC market dominance as altcoins gained traction.

BTC/USD daily price chart. Source: TradingView

Spot Bitcoin ETFs outflows resume

Bitcoin’s price decline today follows days of outflows from its U.S.-based spot ETFs. Notably, these investment vehicles have witnessed nearly $500 million in withdrawals since June 10.

Spot Bitcoin ETF cumulative inflows. Source: Farside Investors

These ETF outflows coincide with a rise in U.S. dollar’s strength versus a basket of top foreign currencies, signaling a growing risk-off mood among investors. This follows mixed macroeconomic data from the U.S. and the Fed lowering its likelihood of rate cuts from four to just one in 2024.

U.S. dollar index daily performance chart. Source: TradingView

A higher interest rate scenario reduces the opportunity cost of holding riskier assets like cryptocurrencies, a sentiment that has burdened Bitcoin prices down in recent days, including today.

Bitcoin’s market dominance slides

Bitcoin’s losses today further coincides with its declining share in the crypto market.

Notably, the Bitcoin Dominance Index (BTC.D), which measures BTC’s market capitalization versus the rest of the crypto market, dropped 0.55% to 55.14% on June 21, continuing its decline from the local top of 56.29% established three days ago. 

BTC.D daily performance chart. Source: TradingView

In other words, most investors have rotated their capital out of the Bitcoin market to seek opportunities in altcoins, particularly in the wake of the U.S. Securities and Exchange Commission’s (SEC) decision to end its investigation into Ethereum, the leading altcoin by market capitalization.

These trends are further visible among institutional investors, with the CoinShares weekly report showing investors withdrawing capital from Bitcoin-based investment funds but increasing their exposure to altcoins, particularly Ether (ETH).

“The outflows were entirely focussed on Bitcoin, seeing US$621 million outflows, the bearishness also prompted US$1.8 million inflows into short-bitcoin,” CoinShares wrote.

Net flows into crypto funds. Source: CoinShares

BTC price: technical correction?

Bitcoin’s losses today is part of a broader correction occurring inside its prevailing bull flag pattern.

Bull flags are bullish continuation pattern characterized by two downward-sloping, parallel trendlines after a strong upside move. As a rule of technical analysis, the pattern resolves after the price breaks above the upper trendline and rises by as much as the height of the previous upside move.

Related: 6 months of sideways? Bitcoin price action mimics 2023 lull

As of June 21, BTC’s price was pulling back after testing the upper trendline of its bull flag pattern, eyeing a further drop toward the lower trendline below $60,000, which it may hit by June’s end.

BTC/USD daily price chart. Source: TradingView

Nonetheless, Bitcoin’s overall bias is skewed to the upside, eyeing a breakout above the flag’s upper trendline at around $72,000 if the technical pattern plays out as intended. Should it happen, BTC’s bull flag target will be around $88,000 by July or August.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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