Crypto Market Faces Second-Worst Weekly Decline of 2024 Amid Cooling Demand for Bitcoin ETFs and Policy Uncertainty
Cryptocurrency Market Faces Second-Worst Weekly Decline of 2024 Amid Cooling Demand for Bitcoin ETFs and Uncertainty Over Monetary Policy
The cryptocurrency market is reeling from its second-worst weekly decline of 2024, with Bitcoin shedding as much as 8.1% to $58,528 on Monday, marking the biggest intraday decline since April 13. This drop comes as demand for Bitcoin exchange-traded funds cools and uncertainty looms over monetary policy.
According to data compiled by tracker Coinglass, more than $210 million worth of bullish bets in crypto were liquidated in the past 12 hours, reflecting the mounting losses in the market. A gauge of the largest 100 digital assets fell about 5% in the seven days through Sunday, the steepest such slide since April.
Adding to the selling pressure is the announcement by the rehabilitation trustee of Mt. Gox, the Japanese crypto exchange that was hacked over a decade ago, that repayments of Bitcoin and Bitcoin Cash will begin in July. This news has led market participants to position themselves short, according to Stefan von Haenisch, head of trading at OSL SG Pte.
The retreat in digital assets also comes amid doubts about the Federal Reserve’s ability to quickly cut interest rates from a two-decade high. Analysts see the decline in crypto as a warning sign for broader risk appetite, with low volatility and soft volumes characterizing the current market dynamic.
Despite preparations for the launch of the first US ETFs investing directly in Ether, the second-ranked cryptoasset, and Solana’s popularity among digital-asset hedge funds, the market is struggling to catch a bid. Bitcoin, which hit a record of $73,798 in March, is now trailing traditional investments like stocks, bonds, and gold this quarter.
As Bitcoin investment products saw around $600 million in outflows for a second consecutive week, digital asset products overall were hit with $584 million in outflows in the week ended June 21, according to data from CoinShares International Ltd. The market is now eyeing the 200-day moving average at about $57,500 as a possible zone of support for the price.
“A bearish mood seems to be setting in,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets. “The market is finding it hard to digest any large sell orders.”
With the cryptocurrency market facing significant challenges, investors and analysts are closely monitoring developments to see how the market will respond in the coming days.
