Markets
Why is the crypto market down today?
Bitcoin and other cryptocurrencies fell early Tuesday. Despite significant inflows into Bitcoin-related exchange-traded funds, the leading cryptocurrency is not experiencing significant growth. Bitcoin declined by 3.6% over the past 24 hours to $66,867. It hit a record high of nearly $74,000 in mid-March due to renewed interest from new cash exchange-traded funds.
On the other hand, the price of ETH is falling sharply despite the recent approval of the Ethereum spot ETF by the SEC. Ethereum price is down over 4.2% in the last 24 hours, currently testing buyers’ patience at $3,500. Major altcoins also saw declines: SOL fell 4.8%, BNB fell 5.8%, and Toncoin and Cardano each lost almost 4%.
The coin sector, which had performed well, also felt the market slowdown. Pepe prices fell more than 3%, while Shiba Inu and Dogecoin prices fell 5.3% and 4.4%, respectively.
According to Coinglass data, the total liquidation exceeded $213 million in the last 24 hours and buyers closed long positions worth around $190 million.
Bitcoin ETF faces outflow
On June 10, Farside data showed that Bitcoin (BTC) exchange-traded funds (ETFs) saw an outflow of $64.9 million. This is the first capital outflow since May 10, ending a 19-day streak of inflows. Four ETF issuers contributed to these capital outflows.
Grayscale’s GBTC leads with $39.5 million in outflows, totaling $18 billion in outflows overall. The BTCO Invesco Galaxy ETF saw outflows of $20.5 million, although its total net inflow remains positive at $300 million. Valkyrie’s BRRR ETF saw an outflow of $15.8 million, but still sees a total net inflow of $497 million. Fidelity’s FBTC saw an outflow of less than $3 million, but still maintains a strong total inflow of $9.6 billion.
Read also : Top 3 Reasons Bitcoin Price is Down Today: Should You Sell?
This bearish movement in the Netflow metric triggered a decline in buying pressure on the BTC price, resulting in the loss of the $70,000 mark.
US inflation intensifies selling pressure
A report from the Bureau of Labor Statistics on the Consumer Price Index, a key measure of the cost of living, is expected Wednesday. According to a Dow Jones Newswires and Wall Street Journal survey, economists forecast that prices rose 0.1% in May, up from 0.3% in April, which would be the smallest increase since October. This would translate into a year-over-year increase of 3.4%, matching the rate recorded in April.
Learn more: US CPI Triggers Bitcoin Volatility: New High or Price Drop?
The US Federal Reserve will release its FOMC statement, economic projections and interest rate decisions tomorrow, creating a tough battle between the bears and the bulls.
Continued selling pressure caused the market’s fear and greed index to decline. In a matter of days, the index fell from a high of nearly 66 to a recent low of 60. This indicates a shift toward a sense of “fear” in the market.
ECB rate cut created negative sentiment
Last week, crypto markets began to decline following the US jobless claims report. Additionally, bearish sentiment has increased due to the ECB rate cut. Despite a neutral stance and no clear commitment to further easing, the rate cut has reduced the yield advantage over the euro.
The ECB’s more dovish approach compared to the Fed and the possibility of further cuts have intensified the selling momentum in the crypto market.