Bitcoin hits onemonth low as market experiences selloff presenting an opportunity
Bitcoin (BTC) has reached a low point not seen in a month due to substantial outflows from digital-asset investment products and concerns about ongoing high US borrowing costs affecting the cryptocurrency market.
The primary digital asset fell by 2.7% on June 18, hitting a level last observed in mid-May before rebounding slightly to trade at $65,266. This drop caused Bitcoin to fall below the crucial support level of the 50-day moving average, indicating a short-term downtrend in the crypto market.
In the second quarter, traditional asset classes like stocks and bonds have shown better returns than Bitcoin, which has decreased by approximately 5%. Global equities, fixed income, and commodities have outperformed Bitcoin, signaling a possible slowdown in the cryptocurrency market.
According to the latest CoinShares Weekly Asset Fund Flows report, there were $621 million in weekly outflows from Bitcoin investment products, while short Bitcoin funds saw $1.8 million in weekly inflows. This was attributed to the Federal Reserve’s unexpectedly hawkish stance, which suggests that high interest rates will be maintained for an extended period, diverting capital away from fixed-supply assets like Bitcoin.
Altcoins, on the other hand, displayed resilience despite Bitcoin’s decline. Ethereum (ETH) investment products received $13.1 million in inflows, while Lido (LDO) and XRP Ledger (XRP) investment vehicles saw $2 million and $1.1 million in inflows, respectively. However, these inflows were insufficient to offset the overall market outflows, leading to a decline in total digital assets under management from $100 billion to $94 billion during the week.
Institutional adoption of digital assets, particularly Bitcoin exchange-traded funds (ETFs) in the US, remains slow, with all nine spot Bitcoin ETFs recording outflows of $208 million. Fidelity’s FBTC saw outflows of over $80 million, while Grayscale’s GBTC recorded outflows of over $60 million.
Blockchain analytics platform Santiment highlighted that Bitcoin’s price drop below $67,000 resulted in a wave of liquidations across the cryptocurrency market. Bitcoin is currently trading above $64,500, causing concerns among traders and investors. This three-day decline is the most significant since before Bitcoin’s all-time high of $73,000 on March 14.
Traders are cautious about further price drops and have been liquidating their holdings, contributing to Bitcoin’s lackluster performance this quarter. However, these corrections are part of the natural market cycle and could present a strategic entry point for long-term investors.
On the flip side, Ethereum wallets have seen an increase, indicating continued bullish sentiment among investors for the second-largest cryptocurrency. Despite the recent market crash, traders and investors remain hopeful for a potential recovery in the future. Bitcoin is currently trading at $64,636, with a 1% decrease on the daily chart and a 3% drop on the monthly chart, and its market cap has dipped just below $1.3 trillion.
Traders and investors are monitoring these movements with cautious optimism, recognizing the cyclical nature of the market and the potential opportunities it presents. It is essential to note that the content on this site should not be considered investment advice, as investing is speculative, and capital is at risk.
