Bitcoin
Bitcoin Records Biggest Drop in Two Months as Liquidations Increase
(Bloomberg) — Losses are piling up in the cryptocurrency market after its second-worst weekly decline in 2024, a reflection of cooling demand for Bitcoin exchange-traded funds and uncertainty over monetary policy.
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Bitcoin fell as much as 8.1% to $58,528 on Monday, the biggest intraday decline since April 13. The leading token by market value has been affected by two weeks of outflows from exchange-traded products that hold the cryptocurrency. More than $210 million in bullish crypto bets have been liquidated in the past 12 hours, according to data compiled by tracker Coinglass.
A gauge of the 100 largest digital assets fell about 5% in the seven days through Sunday, the sharpest drop since April, data compiled by Bloomberg show.
Adding to fears of increased selling pressure, the rehabilitation administrator of Mt. Gox – the Japanese crypto exchange that was hacked more than a decade ago – announced that it would begin Bitcoin and Bitcoin Cash payouts in July.
“Given the Mt Gox announcement, it appears that there are market participants positioning themselves short,” Stefan von Haenisch, head of trading at OSL SG Pte. “Crypto markets are struggling to get a supply right now.”
The cracks in cryptocurrencies come amid doubts about the Federal Reserve’s ability to quickly cut interest rates from their highest in two decades. For some analysts, the decline in digital assets is a warning sign for a broader appetite for risk.
Current crypto market dynamics are “characterized by low volatility, weak volumes, and unbalanced order books as prices begin to move toward the edges of their range,” wrote David Lawant, head of research at FalconX, in a note.
The drops in some corners are particularly notable: the streak of weekly drops for Ether and Solana is the longest since last year and 2022, respectively.
This comes as fund companies prepare to launch the first U.S. ETFs investing directly in Ether, the No. 2 cryptocurrency. Meanwhile, Solana was recently the favorite of a variety of digital asset hedge funds.
Bitcoin hit a record high of $73,798 in March, but is trailing traditional investments such as stocks, bonds and gold this quarter. The 200-day moving average at around $57,500 is in focus now as a possible support zone for the price, according to Tony Sycamore, market analyst at IG Australia Pty.
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“It looks like a bearish mood is setting in,” said Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets. “The market is finding it difficult to digest large sell orders.”
Bitcoin investment products saw outflows of about $600 million for the second week in a row, the most in a two-week period since the U.S. approved exchange-traded funds to hold the biggest cryptocurrency in January.
Overall, digital asset products were hit with outflows of $584 million in the week ending June 21, data from CoinShares International Ltd shows. Bitcoin products accounted for the majority, with outflows of $630 million after another $ 600 million in the previous week.
—With assistance from Suvashree Ghosh and Benjamin Taubman.
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