One possible factor may even be tied to the incoming Federal Reserve chairman.
Bitcoin traded above $82,000 during the previous business week before facing a sharp rejection that pushed the asset down by more than $7,000 in just a few days. The decline drove BTC to a monthly low of $75,000 overnight.
Here are some of the key reasons behind the latest correction.
Trump Media and Mark Cuban Fuel Sell Off Concerns
CryptoPotato reported that a wallet connected to the Trump family operated Trump Media Group transferred more than $200 million worth of bitcoin to exchanges, likely with plans to sell. The group carried out a similar move four months ago and remains heavily underwater on its BTC holdings, which were accumulated near the asset’s all time high.
Additional uncertainty emerged after billionaire investor Mark Cuban revealed that he had sold most of his bitcoin holdings. Cuban explained that he no longer believes BTC serves as an effective hedge against weakening fiat currencies and geopolitical tensions. According to him, bitcoin’s recent behavior during the conflict involving Iran raised doubts about one of the main reasons he originally invested in the asset.
At the same time, crypto analyst Ali Martinez noted that other investors have also been moving large amounts of bitcoin to exchanges. Data from Santiment showed that approximately $745 million worth of BTC was transferred to trading platforms within just five days.
Such activity usually increases short term selling pressure because investors often move funds to exchanges when preparing to sell.
Warsh Appointment and Rising War Tensions Add Pressure
Bitcoin’s latest decline accelerated only hours after Kevin Warsh was sworn in as the next Chairman of the Federal Reserve.
Analysts believe the biggest concern for bitcoin and the broader crypto market may come from Warsh’s approach to the Fed’s balance sheet. He has previously argued that the balance sheet is too large and has hinted at support for quantitative tightening, a policy that has historically weighed heavily on risk driven assets such as cryptocurrencies.
At the same time, geopolitical tensions intensified after reports surfaced that the US President plans to launch a fresh round of military strikes against Iran following failed negotiations between both sides. CBS also reported that the President and several members of the US military and intelligence community canceled Memorial Day weekend plans in anticipation of possible attacks.
The ongoing conflict has already affected bitcoin’s price action in recent months, and fears of renewed escalation are unlikely to improve market sentiment. If the ceasefire collapses and attacks resume, bitcoin could face even more downside pressure in the near term.#crypto#cryptonewshttps://coinsignals.nethttps://t.me/coinsignalpublic
