Bitcoin, the digital currency that has captivated the world, is experiencing a sudden and significant drop in value, leaving investors anxious about its future trajectory. The cryptocurrency, which had been steadily climbing in recent months, has now fallen below the crucial $61,000 mark, sparking concerns among analysts about a possible major correction if it fails to maintain its ultimate support level of $56,000.

Cooling PCE Data and Macroeconomic Factors

The article delves into the potential reasons behind Bitcoin's price decline, citing the recent U.S. macroeconomic figures as a contributing factor. The core Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, has shown a slowdown in growth, with May's annual rate at 2.6%, the lowest since March 2021. However, despite these relatively low inflation numbers, Bitcoin has not responded positively and continues to trade in the $60,000 range.

Weakening Support and Potential Bearish Momentum

Market analysts are closely monitoring the situation, warning that support for Bitcoin is weakening below the $60,000 mark. If the price fails to hold this level, a massive bearish momentum may follow, potentially leading to a sharp drop to $54,000. CryptoQuant data suggests that the critical level of support for Bitcoin is at $56,000, and if this support level is not sustained, a significant price decline could occur.

Decreasing Demand and Trading Volume

The article also highlights the decreasing demand from long-term holders and U.S. investors as a contributing factor to Bitcoin's price decline. Long-term BTC holders have been reducing their holdings throughout 2024, with significant sell-offs observed in May and June. Additionally, trading volume has seen a significant decrease of 12.84%, settling at $39.92 billion, which may indicate low market turnover and traders' interest, resulting in low liquidity and high volatility.

As the cryptocurrency market continues to evolve, investors are closely monitoring the situation and preparing for potential volatility in the coming days and weeks. The article serves as a reminder of the importance of staying informed and making well-informed decisions when investing in digital currencies.