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Why is the cryptocurrency market down today?
Bitcoin and other cryptocurrencies tumbled early Tuesday. Despite significant inflows into Bitcoin-related exchange-traded funds, the leading cryptocurrency is not seeing significant momentum. Bitcoin fell 3.6% in the past 24 hours to $66,867. It hit a record high near $74,000 in mid-March due to a surge in interest from new spot exchange-traded funds.
On the other hand, the price of ETH is falling dramatically despite the recent approval of the Ethereum spot ETF by the SEC. Ethereum price has fallen by more than 4.2% in the past 24 hours, currently testing buyers’ patience at $3,500. Major altcoins also suffered declines: SOL fell 4.8%, BNB fell 5.8%, and Toncoin and Cardano lost nearly 4% each.
Even the meme coin sector, which had recorded good results, was affected by the market downturn. Pepe prices fell by more than 3%, while Shiba Inu and Dogecoin prices fell by 5.3% and 4.4%, respectively.
According to Coinglass data, total liquidation exceeded $213 million in the past 24 hours and buyers closed long positions worth around $190 million.
Bitcoin ETF risks outflow
On June 10, data from Farside showed that Bitcoin (BTC) Exchange Traded Funds (ETFs) saw an outflow of $64.9 million. 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 outflows of $39.5 million, for a total of $18 billion in overall outflows. The Invesco Galaxy BTCO ETF saw outflows of $20.5 million, although their total net inflows remain positive at $300 million. Valkyrie’s BRRR ETF saw an outflow of $15.8 million, but still has a total net inflow of $497 million. Fidelity’s FBTC had a smaller outflow of $3 million, but maintains a strong total inflow of $9.6 billion.
Read also: Top 3 Reasons Why Bitcoin Price Is Falling Today: Should You Sell?
This bearish move in the Netflow parameter triggered a drop in buying pressure for the BTC price, resulting in it missing the $70,000 mark.
US inflation creates pressure on sales
The Bureau of Labor Statistics’ report on the consumer price index, a key measure of the cost of living, is expected Wednesday. Economists expect prices rose 0.1% in May, down from April’s 0.3% rise, marking the smallest increase since October, according to a survey by Dow Jones Newswires and The Wall Street Journal. . This would translate into a year-over-year increase of 3.4%, matching the rate recorded in April.
To know more: US CPI triggers Bitcoin volatility: new high or price collapse?
The US Federal Reserve will release its FOMC statement, economic projections and interest rate decisions tomorrow, setting up a tough battle between bears and bulls.
Continued selling pressure has caused the market’s fear and greed index to decline. In just a few days, the index fell from a high of nearly 66 to a recent low of 60. This indicates a shift towards a “fearful” sentiment in the market.
The rate cut by the ECB created negative sentiment
Last week, cryptocurrency markets began to collapse following the US unemployment claims report. Furthermore, bearish sentiment increased due to the ECB rate cut. Despite a neutral stance and no clear commitment to further easing, the rate cut reduced the yield advantage over the euro.
The ECB’s more accommodative approach compared to the Fed and the possibility of further cuts have intensified the selling momentum in the cryptocurrency market.