What’s Causing the Crypto Market Decline Today?
Shayan Chowdhury11 Jun 20243 min read
Bitcoin and other cryptocurrencies fell early Tuesday. Despite significant inflows into exchange-traded funds linked to Bitcoin, the leading cryptocurrency isn’t seeing a significant boost. Bitcoin decreased by 3.6% over the past 24 hours to $66,867. It reached a record high near $74,000 in mid-March due to a surge of interest from new spot exchange-traded funds.
On the other hand, the price of ETH is declining steeply despite the recent approval of the spot Ethereum ETF by the SEC. Ethereum price declined by over 4.2% in the last 24 hours, currently testing buyers’ patience at $3,500. Leading altcoins also experienced drops: SOL decreased by 4.8%, BNB fell by 5.8%, and Toncoin and Cardano each lost nearly 4%.
The meme coin sector, which had been performing well, also felt the market downturn. Pepe prices dropped by over 3%, while Shiba Inu and Dogecoin prices fell by 5.3% and 4.4%, respectively.
According to Coinglass data, the total liquidation surpassed $213 million in the last 24 hours, and buyers closed around $190 million worth of long positions.
Bitcoin ETF Faces Outflow
On June 10, data from Farside showed that Bitcoin (BTC) exchange-traded funds (ETFs) experienced a $64.9 million outflow. This marked the first outflow since May 10, ending a 19-day streak of inflows. Four ETF issuers contributed to these outflows.
Grayscale’s GBTC led with $39.5 million in outflows, totaling $18 billion in outflows overall. The BTCO Invesco Galaxy ETF saw $20.5 million in outflows, though their total net inflow remains positive at $300 million. Valkyrie’s BRRR ETF experienced a $15.8 million outflow, but still has a total net inflow of $497 million. Fidelity’s FBTC had a smaller outflow of $3 million, yet maintains a strong total inflow of $9.6 billion.
Also read: Top 3 Reasons Why Bitcoin Price is Down Today: Should You Sell?
This bearish move in the Netflow metric triggered a decline in buying pressure for BTC price, resulting in losing the $70K milestone.
US Inflation Builds Selling Pressure
A Bureau of Labor Statistics report on the Consumer Price Index, a key measure of the cost of living, is expected on Wednesday. According to a survey by Dow Jones Newswires and the Wall Street Journal, economists predict that prices rose 0.1% in May, down from a 0.3% increase in April, marking the smallest rise since October. This would result in a year-over-year increase of 3.4%, matching the rate recorded in April.
Read more: US CPI Sparks Bitcoin Volatility: New High or Price Plunge?
The United States Federal Reserve will release its FOMC statement, economic projections, and interest rate decisions tomorrow, creating a tough battle between the bears and bulls.
Continuous selling pressure has caused a decline in the market’s fear and greed index. In a few days, the index fell from a high of nearly 66 to a recent low of 60. This indicates a shift towards a ‘Fear’ sentiment in the market.
ECB’s Rate Cut Created Negative Sentiment
Last week, the crypto markets started dipping following the U.S. jobless claims report. Additionally, the bearish sentiment increased because of the ECB rate cut. Despite a neutral stance and no clear commitment to further easing, the rate cut has reduced the yield advantage on the euro.
The ECB’s more dovish approach compared to the Fed and the possibility of more cuts have intensified the selling momentum in the crypto market.
