Bitcoin Price Prediction: Why Is Bitcoin Dropping?

July’s consumer inflation cooled to 3.4% on August 12, and producer prices came in unchanged the next day against the 0.2% rise economists expected. Cooling inflation gives the Federal Reserve room to stop raising rates, and cheaper money is what usually sends the Bitcoin price higher.

However, Bitcoin (CRYPTO:BTC) fell on both prints, dropping from an intraday high of $65,234 to $63,304 after the consumer numbers, while the Nasdaq and S&P 500 both climbed on the same news. So why is Bitcoin dropping when the news is finally going its way?

How Far Bitcoin Has Fallen This Year

Bitcoin is worth roughly $1.28 trillion today, about half what it was worth at its $126,000 record last October, and the Bitcoin price is well below the $119,400 it traded at this time last year.

At the start of January, Bitcoin traded at $88,764. It fell 34% over the next six months and closed June at $58,566, its lowest in 21 months. A Federal Reserve that kept talking about raising rates did most of that damage, while $4 billion left the spot Bitcoin ETFs in June, which was their worst month on record.

Between 45% and 46% of all Bitcoin is now worth less than what its buyers paid, which is roughly 9 million coins. Anyone who bought in the last six months paid $68,700 on average, according to Glassnode, so they are down 7.2% and they sell whenever the price climbs back toward what they paid. That is why Bitcoin has been stuck between $58,000 and $68,000 since June.