Bitcoin (BTC) experienced a significant decline of over 4% in the past 24 hours, trading near the $58,000 mark during the afternoon in Asia on Thursday. This downturn erased almost all the gains made in the previous week. The decline in BTC triggered a broader sell-off among major cryptocurrencies. Ether (ETH) dropped by 3.8%, while Solana (SOL), Cardano (ADA), BNB Chain (BNB), and Ripple's XRP saw smaller decreases of 2.5%.
The downturn followed the release of the latest U.S. consumer price index (CPI) data for July, which came out late on Wednesday. July's CPI rose by 2.9% year-on-year, aligning with expectations, and marked the first time since 2021 that it had fallen below 3%.
Despite the NASDAQ and S&P 500 reversing an initial sell-off and closing the day in positive territory, BTC continued its decline after the CPI report. In recent months, cryptocurrency prices have been "highly sensitive" to U.S. economic data, as noted by K33 Research, with market movements reflecting investors' preference for stability over riskier assets.
Some traders anticipate that BTC prices may drop further to around $55,000 in the short term before potentially rebounding, which could lead to additional losses for major tokens.
"A new sell-off momentum is still the prevailing scenario, with a potential pullback to $55K," according to Alex Kuptsikevich, the FxPro senior market analyst.
"Data supporting the Fed's imminent easing of monetary policy may encourage the bulls to overcome the short-term downtrend and give the green light to rise to $66K."
Meanwhile, U.S.-listed spot bitcoin exchange-traded funds (ETFs) saw $81 million in net outflows on Wednesday, ending a two-day positive streak. Grayscale’s GBTC recorded the highest outflows at $56 million, followed by Fidelity’s FBTC with $18 million in outflows. Ark Invest’s ARKB and Bitwise’s BITB experienced outflows of $6.7 million and $5.7 million, respectively.
In contrast, Franklin Templeton’s EZBC and BlackRock’s IBIT were the only products with net inflows, totaling $6 million combined.
Ether ETFs performed better, with $10 million in net inflows, marking a three-day streak. BlackRock’s ETHA recorded $16 million in inflows, while Grayscale’s ETHE saw $16 million in outflows. Grayscale’s mini Ether trust ETH, Fidelity’s FETH, and Bitwise’s ETHW collectively attracted $11 million in inflows.
