Bitcoin’s Mid-Year Slump: What’s Behind the Recent Price Drop?

Bitcoin’s value has taken a hit, falling to its lowest price since May 3. The cryptocurrency’s strong returns following January’s landmark approval of spot bitcoin exchange-traded funds have been cut into, leaving investors wondering what’s behind the mid-year slump.

A graph showing bitcoin’s recent price drop

It’s been a down June for bitcoin, with the cryptocurrency falling by nearly 7% by 6:30 p.m. Greenwich Mean Time, or 2:30 p.m. ET. Despite recovering to about $60,200 shortly after, bitcoin is now down 11% in June, although it remains up 42% year-to-date.

“The crypto bears have become louder again,” Bernstein analysts Gautam Chhugani and Mahika Sapra wrote to clients Monday. “After months of Bitcoin ETF euphoria, the market suddenly feels bearish.”

A graph showing the impact of ETF approval on bitcoin’s price

The recent losses were apparently catalyzed by anticipated sales linked to long-shuttered Japanese exchange Mt. Gox’s looming return of nearly $9 billion worth of bitcoin to creditors and the German government’s reported sale of hundreds of millions of dollars worth of the cryptocurrency.

Other cryptocurrencies also slumped Monday, as Ether, Binance coin, and Solana all fell 2.8% or more.

A graph showing the recent slump in cryptocurrency prices

Bitcoin withdrawals at crypto exchanges outnumbered deposits by $522 million from Wednesday to Sunday, according to FactSet data, indicating a number of bitcoin holders are cashing out on their investments.

Despite the recent downturn, Bernstein analysts maintain a highly bullish $200,000 price target for bitcoin, expecting prices to more than triple.

A graph showing Bernstein’s bullish price target for bitcoin

The recent slump in bitcoin’s price has left investors wondering what’s next for the cryptocurrency. Will it continue to fall, or will it bounce back? Only time will tell.