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Why Are Cryptocurrencies Down Today? Mt. Gox Liquidations of $250M, ETH ETFs and…
- Bitcoin dips below $60,000 as ETF outflows and options expirations trigger market-wide liquidations
- Analyst Ali Martinez warned of a potential $1 billion liquidation if Bitcoin bounces to $62,600
Bitcoin (BTC) is falling again, with the cryptocurrency dipping below $60,000 on the price charts. This represented a 4% decline in just 24 hours. In fact, this wave of depreciation has marked BTC as the hardest-hit cryptocurrency amid a broader market-wide downturn.
Source: BTC/USD, TradingView
This drop coincided with the cryptocurrency market dropping by more than 4% in the last 24 hours, which affected major assets such as Bitcoin, Ethereum, DOGE, BNB and LINK.
It is worth noting, however, that the Fear & Greed Index was reading just 48 at press time, indicating a neutral sentiment among market participants. Investors are simply not overly fearful or overly greedy at this time, but uncertainty remains prevalent.
This is especially true given that Mt. Gox is expected to begin repaying its creditors this month. Over $9 billion worth of BTC is owed to over 127,000 creditors, many of whom will be looking to cash in on their unrealized profits — an invitation for selling pressure.
Bitcoin ETF Outflows and Investor Concerns
Outflows from US Spot Bitcoin ETFs have contributed significantly to the ongoing market situation. After five consecutive days of inflows amounting to $129.5 million until July 1, the trend reversed with an outflow of $13.7 million on July 2.
Source: X
BlackRock IBIT and Fidelity’s FBTC saw inflows of $14.1 million and $5.4 million, respectively. However, a significant outflow of $32.4 million from GrayScale tempered these gains. This shift in ETF movements, in turn, has raised concerns among investors about the price action of Bitcoin.
At the same time, the impending expiration of substantial BTC and ETH options has also contributed to market volatility. In fact, data from Deribit revealed that over $1.04 billion worth of BTC options, with a put/call ratio of 0.80, are set to expire on Friday, July 5.
Source: Deribit
The maximum pain price for these options is $63,000, indicating a critical threshold that could influence investor behavior and market dynamics. As a result, the anticipation of this expiration has led to cautious trading and increased uncertainty among market participants.
Liquidations intensify market sales
Second Coin glassThe recent sell-off triggered over $260 million in liquidations in just 24 hours. Over 100,000 traders were liquidated during this period, with the largest single liquidation involving an ETH-USDT-SWAP on OKX.
Bitcoin faced liquidations totaling $67 million, while Ethereum saw liquidations totaling $63 million.
Source: Coin glass
Despite the current downturn, however, some analysts remain optimistic about the market’s future. They foresee potential gains tied to upcoming regulatory decisions.
That said, analyst Ali Martinez has warned against the potential for further liquidations. According to him, if Bitcoin rebounds to reach $62,600 again, the market could see over $1 billion in liquidations.
Source: X
Ethereum ETF Launch Delayed
Finally, the delay in launch of Spot Ethereum ETFs has further contributed to the current market pessimism. The SEC has set a new deadline of July 8 for filing forms, delaying the expected approval process.
The community has yet to receive this, with ETF Store President Nate Geraci among those expressing frustration with the drawn-out process. Many are now hoping that BTC and the rest of the cryptocurrency market will continue its bull run once these ETFs go live.