Bitcoin drops 4% to $61,000, witnesses second-worst weekly decline; What's behind the plunge?

livemint.com:

World's biggest cryptocurrency Bitcoin witnessed a downturn of over 3 per cent on Monday, falling to $61,000 level. Losses are mounting in the crypto market following its second-worst weekly decline of 2024, driven by waning demand for Bitcoin exchange-traded funds and uncertainty surrounding monetary policy.

As of 11:44 a.m. on Monday in London, Bitcoin fell 4% to $61,153, marking its lowest point in over a month. The leading cryptocurrency by market value has been impacted by a six-day streak of outflows from dedicated US ETFs.

The cryptocurrency maintains a market cap of around $1.2 trillion. Despite the prevailing downturn, Bitcoin's open interest has experienced a slight uptick of 0.59 per cent, reaching a current valuation of $19.1 billion.

“The crypto market is currently experiencing a downturn, leaving many individuals feeling confused and scared about their next steps. BTC is now approaching the critical level where many will give up this cycle. BTC is playing much the same role as gold did in the early days of banking. The current downfall is due to three major reasons such as minors selling btc to fuel their mining activities, Germany is selling 3b USD of bitcoin and Mt. Gox, the erstwhile crypto exchange announcing the bitcoin cash repayments in July," said Avinash Shekhar, CoFounder & CEO, Pi42.

Recent market sentiment indicates that investors are adopting a cautious approach, refraining from aggressive moves due to various factors that are tempering their risk appetite. These factors have not only impacted the price of Bitcoin but have also overshadowed the prices of the entire cryptocurrency market.

Bitcoin's recent performance has been significantly influenced by uncertainty over Federal Reserve interest rate