Bitcoin experienced a significant drop of up to 8.1% to $58,528 on Monday, marking its largest intraday decline since April 13. This decline comes amidst persistent outflows from exchange-traded products holding the cryptocurrency, totaling more than $210 million in liquidated bullish bets over the past 12 hours, according to Coinglass data.
The broader digital asset market, including the top 100 cryptocurrencies, also saw a notable decline of about 5% over the past seven days, the sharpest slide since April, as reported by Bloomberg.
Adding to concerns of increased selling pressure, the trustee overseeing the rehabilitation of Mt. Gox, the Japanese crypto exchange that was hacked over a decade ago, announced plans to initiate repayments of Bitcoin and Bitcoin Cash starting in July. This news has led some market participants to position themselves on the short side, exacerbating downward pressure on crypto markets.
Stefan von Haenisch, head of trading at OSL SG Pte, noted, “Crypto markets struggling to catch a bid at the moment,” attributing the current bearish sentiment partially to the Mt. Gox announcement.
The crypto retreat coincides with uncertainties surrounding the Federal Reserve’s stance on interest rates, which analysts suggest could impact broader risk appetite. David Lawant, research head at FalconX, described the current market dynamics as featuring low volatility and soft volumes, with orderbooks becoming unbalanced as prices approach the edges of their ranges.
Notably, Ether and Solana have seen prolonged weekly declines, marking their longest such runs since 2022 and last year, respectively. Despite upcoming launches of the first US ETFs directly investing in Ether, and Solana’s previous popularity among digital-asset hedge funds, both cryptocurrencies have faced sustained downward pressure.
Bitcoin, which reached a peak of $73,798 in March, now trails traditional investments like stocks, bonds, and gold for the quarter. Market analysts are closely watching the 200-day moving average around $57,500 as a potential support level for Bitcoin’s price.
Caroline Mauron, co-founder of Orbit Markets, remarked, “A bearish mood seems to be setting in,” highlighting challenges in absorbing large sell orders within the market.
Investment products tied to Bitcoin saw approximately $600 million in outflows over a two-week period, marking the most significant such outflow since the US approved exchange-traded funds for the cryptocurrency in January. Overall, digital asset products experienced $584 million in outflows for the week ending June 21, with Bitcoin products accounting for the majority.
The current volatility underscores ongoing challenges for cryptocurrencies amid regulatory developments and market dynamics, shaping investor sentiment and market performance moving forward.
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