Bitcoin’s price has fallen nearly 15% during the second quarter of 2024, with altcoins suffering even larger losses. Despite a strong start to the year, persistent selling pressure in April and June has left Bitcoin struggling to stay above $60,000, down from just under $71,000 at the beginning of the quarter. Ether, supported by expectations of spot ETF approval, saw a smaller decline of about 5%. Overall, the CoinDesk Index dropped more than 21%, with significant losses in Solana (30%), Ripple (23%), and Dogecoin (42%).

Catalysts and Market Sentiment

The decline in Bitcoin’s price can be seen as a correction within a larger bullish trend, following its rise to an all-time high of over $73,500 in March. Key factors driving this surge included anticipation and approval of spot Bitcoin ETFs and expected interest rate cuts from the U.S. Federal Reserve. However, with inflation remaining stubbornly high, there has been no easing of monetary policy, diminishing hopes for rate cuts in 2024. The excitement over ETF inflows has subsided, and investors are now waiting for new catalysts.

A difficult Q2 comes to a close (sergeitokmakov/Pixabay)

Outlook for Q3

Looking ahead, some analysts, including Markus Thielen from 10X Research, suggest further declines for Bitcoin, potentially down to $55,000. Thielen notes that trend-following funds may increase short positions based on current signals. Additionally, political developments, such as the possibility of a new Democratic nominee for the U.S. presidency, could influence market sentiment. Historically, the third quarter has been the weakest for Bitcoin, with an average return of just 5% over the past 13 years, compared to higher returns in other quarters.