WHY Is The Crypto Market DOWN Today: REASONS For Bitcoin Price Drop

Recent events have significantly impacted the market in the dynamic world of cryptocurrencies. This article overviews these current events, factors influencing Bitcoin price and Altcoins, and some expert insights into market trends in an attempt to understand why is the crypto market down and the main reasons for Bitcoin price drop.

Bitcoin Price Drop and Altcoins Follow: A Cryptocurrency Price Overview

As of August 1, the global cryptocurrency market cap dipped to $2.30 trillion, marking a 2.60% decline over 24 hours. Bitcoin (BTC), the most valued cryptocurrency, slipped below the $65,000 mark, closing at $64,184 with a 2.51% decrease. Ethereum (ETH), Dogecoin (DOGE), Solana (SOL), Ripple (XRP), and Litecoin (LTC) also saw declines. However, with the last increase in XRP price the decrease managed to keep its price trading over its usual support levels, not like other altcoins, such as Solana price which dipped below its key support level of $170 after breaking out to highs of $193.

Why Is The Crypto Market Down: Reasons for Bitcoin Price Drop

Several events occurred recently at the same time pushing the Bitcoin price drop and Altcoins followed. The major ones were: the FOMC concluding its July meeting yesterday, the attack on Iran by Israel, targeting the Hamas political leader, shaking the Middle East, and spreading fear of counter-attacks and escalations in the region. As well as other events such as the Mt. Gox transfers, the BitClout founder arrest on fraud, and the US $2B transfer after Trump's speech calling for not selling Bitcoins, the volatile crypto market was affected causing the Bitcoin price drop and that of Altcoins too. These major factors can be interpreted as below:

1. Federal Reserve's Decisions: The US Federal Reserve's decision to keep interest rates unchanged at 5.25%-5.50% led to a temporary dip in cryptocurrency prices. Market anticipation of a potential rate cut in September could trigger bullish trends.
2. Geopolitical Tensions: Rising tensions between Iran and Israel have also influenced investor sentiment, causing Bitcoin to dip below the $64,000 level.
3. Market Fear & Greed Index: Currently at 57 (Neutral), indicating a balanced market sentiment without extreme fear or greed.

What are Expert Insights on the Bitcoin price drop?

Some experts and analysts of the crypto market community have had their input on our question "Why Is The Crypto Market Down" by their analysis of the factors:

• Mudrex: CEO Edul Patel notes that Bitcoin's fall below $64,000 is due to geopolitical tensions and the Fed’s unchanged rates, suggesting support at $63,200 and resistance at $65,100.
• CoinSwitch: Analysts highlight that while Bitcoin fell below $65,000, expectations of a rate cut in September could strengthen the outlook for a rally by year-end.
• Unocoin: CEO Sathvik Vishwanath observes increased BTC withdrawals from exchanges, signaling investor accumulation despite current bearish trends.

Why the FOMC rates decision cause the Bitcoin price drop?

Historically, FOMC actions have impacted all asset classes, with cryptocurrencies reacting strongly to changes in interest rates. For instance, Bitcoin and altcoins soared in 2020-2021 when rates were slashed but faced declines as rates rose in 2022. The current pause in rate changes has already been factored into prices, but future rate cuts could uplift the market.

What's after the Bitcoin price drop, any recovery soon?

In the current tensed and volatile market, a recovery is certain to happen. However when, and how high for Bitcoin price and Altcoins remains uncertain. But some key points for investors to note are:

1. Short-Term Dip, Long-Term Potential: While there’s a short-term dip, analysts see bullish signals for Bitcoin and other cryptocurrencies.
2. Geopolitical Risks: Investors should monitor geopolitical developments, particularly in the Middle East, as these can impact market stability.
3. Federal Reserve Actions: Upcoming Fed meetings and potential rate cuts will be crucial in determining market direction.