The cryptocurrency market is experiencing significant losses following its second-worst weekly decrease in 2024. This downturn is driven by decreasing demand for Bitcoin exchange-traded funds (ETFs), uncertainty surrounding the U.S. Federal Reserve’s monetary policy, and overall weak appetite for digital assets, marking the sharpest decline since April.
Bitcoin, the leading cryptocurrency by market value, saw its price drop by nearly 5% to $61,000, falling below its one-month low. This decline is part of a broader market trend, with Bitcoin facing a six-day streak of withdrawals from U.S. ETFs dedicated to the digital asset. In the last 24 hours alone, 90,987 traders were liquidated, resulting in a total liquidation value of $283.23 million.
The decline in the crypto market coincides with growing skepticism about the Federal Reserve’s ability to swiftly lower interest rates following a two-decade peak. This uncertainty has contributed to the overall bearish sentiment in the market. Ether and Solana, in particular, have experienced their longest weekly declines since last year and 2022, respectively.
The global cryptocurrency market valuation currently stands at $2.24 trillion, reflecting a 4.54% decrease over the past day. Bitcoin’s market dominance has also dipped slightly to 53.85%, a decrease of 0.19%, amid significant sell-offs in the altcoin market.
Ethereum, trading at $3,312, is down about 5% from the previous day and 8% from the past week. This is despite reports of substantial long-term holder accumulation during the price decline. Meanwhile, Solana has gained favor among several hedge funds dealing with digital assets, although it continues to experience notable price drops.
Data from Farside indicates that ETFs tracking Bitcoin have seen a series of withdrawals over the last six trading days. On June 13, these outflows reached $226.2 million, the highest of the six days. This trend persists even as fund managers plan to introduce the first U.S. ETFs that invest directly in Ether, the second-largest cryptocurrency by market value.
Despite Bitcoin reaching a record high of $73,798 in March, traditional assets like gold, bonds, and stocks have outperformed it this quarter. The 200-day moving average, currently at $57,500, is being closely watched as a potential support level for Bitcoin.
The recent performance of the cryptocurrency market highlights the ongoing volatility and the challenges it faces amid broader economic uncertainties. As investors continue to weigh the impact of Federal Reserve policies and the evolving demand for digital assets, the market may see further fluctuations. Fund managers and traders are likely to remain cautious, focusing on long-term trends and potential areas of support in the weeks ahead.
