CoinVoice Report:
In the past 24 hours, the total market capitalization of the crypto market has plummeted by $91 billion.
Bitcoin, after a 12-hour tug-of-war around $60,000, initiated a “waterfall” drop at 9:00 AM today, briefly dipping below $58,000 and revisiting lows from a week ago, with a 5.72% decline over 24 hours. As of the time of writing, Bitcoin has recovered above $59,100.
Apart from Bitcoin, mainstream altcoins have also started to decline across the board. Liquidations in the crypto market totaled nearly $100 million within one hour, half of which occurred in the past 12 hours. Leading tokens in the Ethereum ecosystem such as LDO, ETHFI, and ENS saw declines ranging from 8% to 20.46%. Similarly, the Solana ecosystem also faced losses of around 15% for tokens like JTO, WIF, and TNSR.
Despite nearing what appears to be a bottom, reasons for continued declines persist. While the crypto community has accepted the current phase as a “lengthy pullback bottom,” Bitcoin’s volatility has approached new lows since February, yet signals of further downward movement persist.
David Lawant, research director at FalconX, noted in a report: “The current characteristic of the cryptocurrency market dynamics is low volatility and weak trading volume. As prices begin to move towards the edges of ranges, the order book loses balance.”
Bitcoin spot ETFs are crucial indicators for market direction. According to Farside Investors data, Bitcoin ETFs have seen net outflows for two consecutive days, totaling $34.2 million.
Additionally, the absence of new capital inflows remains a significant barrier to meeting market expectations. Stablecoin total market capitalization has steadily increased since mid-last year, correlating with a bullish trend at the time. However, since early May, the crypto market has seen no new inflows, with stablecoin market capitalization hovering around $160 billion for over two months. Without sufficient liquidity within the market, there is a lack of buying pressure to drive prices higher.
With sentiment persistently low, is it time to buy? Bitcoin touched $58,000 a week ago and has now revisited that level. Is this a clearance during a retracement or a sign of the end of the bull market? Opinions in the market diverge.
From a technical analysis perspective, Bitcoin’s RSI on the 4-hour and daily charts shows signs of bullish divergence, suggesting that the recent price drop may have been excessive in the short term. Today’s selling pressure is not as intense as on June 24, potentially setting the stage for a rebound.
Market sentiment may be overly pessimistic. According to crypto KOL Ignas, Bitcoin prices are being artificially suppressed through deceptive sell orders from whales, prompting retail and fund managers to sell off as a hedge.
CryptoQuant released a report yesterday indicating that Bitcoin miners’ rewards have been “extremely low” since the halving, with transaction fee income dropping to just 3.2% of total daily income, the lowest share in three months. With diminishing incentives, miners are beginning to capitulate, shutting down underperforming equipment and selling Bitcoin to hedge risks, historically signaling a market bottom.
However, various signals suggest Bitcoin may continue to decline. Markus Thielen, founder of 10x Research, in his latest report estimates that the average entry price for Bitcoin ETF buyers is between $60,000 and $61,000. Therefore, when Bitcoin fell below $60,000 yesterday, it likely triggered a cascade of ETF liquidations, further depressing prices.
For instance, Thielen believes that Bitcoin’s weekly and monthly chart reversal indicators suggest a broader pullback, potentially pushing prices further down to $55,000. Andrew Kang, co-founder of crypto venture firm Mechanism Capital, sees an even lower bottom, suggesting Bitcoin could experience an extreme pullback to the $40,000 range.
Confidence in Bitcoin’s long-term price remains among market participants. Standard Chartered Bank predicts Bitcoin could hit a new historical high in August and reach $100,000 during the November US presidential election. The bank’s analysts also maintain target prices of $150,000 by year-end and $200,000 by 2025 if Trump is re-elected. Fundstrat co-founder Tom Lee similarly stands by his prediction of Bitcoin reaching $150,000.
“Making money is too hard,” “Sorry, family,” these discussions have become commonplace in the community over the past month. For retail investors, this bull market has proven exceptionally challenging.
